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Free CAGR Calculator

Find the compound annual growth rate (CAGR) of an investment or revenue figure from its starting value, ending value and the number of years between them. CAGR smooths uneven year-to-year returns into one steady annual percentage, making it easy to compare investments over different periods. The tool also shows total growth so you can see the full change at a glance.

CAGR (per year)
14.87%
Total growth
100.00%
Growth multiple
2.00×

$1,000.00 grows to $2,000.00 over 5 years at 14.87% a year.

CAGR = (Ending ÷ Beginning)^(1 ÷ Years) − 1. A smoothed annual rate that ignores deposits, withdrawals, fees, taxes and inflation.

Estimate only. This calculator provides estimates based on the values you enter and the formula shown. It is not financial advice and may not reflect every fee, tax, or lender requirement. Check figures with a qualified professional before making financial decisions.

Quick answer

CAGR is the steady yearly rate that turns a beginning value into an ending value over a given number of years. The formula is CAGR = (Ending ÷ Beginning)^(1 ÷ Years) − 1, expressed as a percentage. For example, growing $1,000 to $2,000 over 5 years gives CAGR = 2^(1/5) − 1 = 0.1487, or about 14.87% per year. Total growth, by contrast, is simply (Ending ÷ Beginning − 1) × 100, which equals 100% in that example.

Formula & method

The calculator divides the ending value by the beginning value to get the total growth multiple, raises that multiple to the power of one divided by the number of years to annualize it, then subtracts one and multiplies by 100 to express it as a yearly percentage. It also reports total growth as (ending ÷ beginning − 1) × 100, the cumulative change over the whole period. The tool guards against invalid inputs by requiring a beginning value greater than zero and a number of years greater than zero, since the formula is undefined otherwise. All math runs locally in your browser; nothing is sent to a server.

Examples

Example 1: Investment doubles in 5 years
Input
Beginning $1,000, Ending $2,000, Years 5
Result
CAGR ≈ 14.87% per year (total growth 100%)
Why
CAGR = (2000 ÷ 1000)^(1/5) − 1 = 2^0.2 − 1 = 1.148698 − 1 = 0.148698, or 14.87% a year. Total growth is (2000 ÷ 1000 − 1) × 100 = 100%, the full change over the five years.
Example 2: Revenue grows 50% over 3 years
Input
Beginning $10,000, Ending $15,000, Years 3
Result
CAGR ≈ 14.47% per year (total growth 50%)
Why
CAGR = (15000 ÷ 10000)^(1/3) − 1 = 1.5^0.3333 − 1 = 1.144714 − 1 = 0.144714, or 14.47% a year. Even though revenue rose 50% in total, the steady annual rate is about 14.47%.
Example 3: Portfolio grows fivefold over 10 years
Input
Beginning $5,000, Ending $25,000, Years 10
Result
CAGR ≈ 17.46% per year (total growth 400%)
Why
CAGR = (25000 ÷ 5000)^(1/10) − 1 = 5^0.1 − 1 = 1.174618 − 1 = 0.174618, or 17.46% a year. The 400% total growth annualizes to a steady 17.46% because compounding builds on itself each year.

When to use this tool

  • Comparing investments or funds held for different lengths of time on an equal, annualized basis.
  • Measuring how fast revenue, users, or any metric has grown per year over a multi-year period.
  • Translating a total return into a steady yearly rate for clearer reporting or forecasting.

Common mistakes

  • Confusing CAGR with average return. Averaging yearly returns (the arithmetic mean) overstates growth; CAGR is the geometric rate that actually links the start and end values.
  • Using total growth instead of the annual rate. Total growth of 100% over 5 years is not 20% a year — compounding makes the true CAGR about 14.87%.
  • Entering a beginning value of zero or a negative number. The formula divides by the beginning value and is undefined at zero, so it must be greater than zero.
  • Mismatching the number of years with the values. Years should be the exact time between the beginning and ending figures (use decimals for partial years, e.g. 2.5).
  • Treating CAGR as a real path. It is a smoothed average; actual returns can swing far above or below it from year to year.

Frequently asked questions

What does CAGR mean?

CAGR stands for compound annual growth rate. It is the single, constant yearly rate that would grow a beginning value into an ending value over a set number of years, assuming the growth compounds each year. It smooths out the ups and downs of individual years into one representative annual percentage.

How is CAGR different from average annual return?

Average annual return is usually the arithmetic mean of each year's return, which ignores compounding and tends to overstate growth. CAGR is the geometric mean — the rate that actually connects the start and end values — so it reflects real compounded growth and is the more honest figure for multi-period comparisons.

Can CAGR be negative?

Yes. If the ending value is smaller than the beginning value, CAGR is negative, showing an average annual decline. For example, going from $1,000 to $800 over 4 years gives a CAGR of about −5.43% per year.

Why does the beginning value have to be greater than zero?

The formula divides the ending value by the beginning value, so a beginning value of zero would divide by zero. A negative beginning value also makes the result mathematically meaningless. The tool therefore requires a positive beginning value and a positive number of years.

Does CAGR account for deposits, withdrawals, fees or taxes?

No. CAGR only uses the beginning value, the ending value, and the time between them. It ignores any cash added or removed along the way, as well as fees, taxes and inflation. For investments with ongoing contributions, a money-weighted return measure is more appropriate.

Can I use a fraction of a year?

Yes. Enter years as a decimal — for example 2.5 for two and a half years or 0.75 for nine months. The formula handles non-integer periods correctly because it raises the growth multiple to the power of one divided by the number of years.

Sources & references

External references open in a new tab. We are independent and not affiliated with these organizations.

Disclaimer

This calculator provides estimates based on the values you enter and the formula shown. It is not financial advice and may not reflect every fee, tax, or lender requirement. Check figures with a qualified professional before making financial decisions.

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  • ✓ Runs entirely in your browser — nothing is uploaded.
  • ✓ Formula and method shown above
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Provided “as is” for general information only — results may be inaccurate, so verify before you rely on them. No warranty; use at your own risk.

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