Business
Calculate compound annual growth across an investment period.
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CAGR calculator guide
Compound annual growth rate, or CAGR, is the single yearly rate that would take a starting value to an ending value if growth had been perfectly smooth. Real portfolios, revenues, and user counts do not grow smoothly, which is exactly why CAGR is useful: it strips out the bumps and gives one comparable number. This calculator takes a starting value, an ending value, and the number of years between them, raises the growth ratio to the power of one over the years, and subtracts one. It also shows total growth over the whole period so you can see how the two figures differ. Use it to compare an investment against an index, to summarise a company’s revenue trend, or to sanity-check a growth claim in a pitch deck. The result ignores contributions or withdrawals during the period, fees, taxes, dividends unless they are already included in the ending value, and inflation, so it describes the path between two snapshots rather than the money you actually kept.
CAGR (% per year) = ((ending value ÷ starting value)^(1 ÷ years) − 1) × 100. Total growth (%) = (ending value ÷ starting value − 1) × 100.
Worked example with the default inputs: a starting value of $10,000 grows to $18,000 over 5 years. Growth ratio = $18,000 ÷ $10,000 = 1.8. Raise it to the power of 1 ÷ 5 = 0.2: 1.8^0.2 = 1.1247. Subtract 1 and convert to a percentage: (1.1247 − 1) × 100 = 12.47% per year. Total growth over the period = (1.8 − 1) × 100 = 80%. Note that 80% ÷ 5 = 16% would be the wrong answer; simple averaging ignores that each year’s growth builds on the last.
Starting and ending value must be in the same currency and the same units, whether that is dollars, subscribers, or tonnes; the ratio between them is all that matters. Years can be fractional, so 30 months is 2.5 years. If you know dates rather than years, divide the day count by 365.25. The calculator reports CAGR to two decimal places and total growth to one.
The result is a planning figure that depends entirely on the assumptions you entered. Fees, taxes, payment timing, and rate changes are not captured unless you built them into the inputs, and small errors in a rate compound quickly over time. Verify the rates and terms against your own agreements or your accountant before making a commitment. On this page the figure rests entirely on starting value, ending value and years, so start there if the cagr calculator returns something you did not expect.
Good to know: CAGR is wrong for any series with money added or removed along the way, because a deposit looks like growth. Use it only between two snapshots with no cash flows, or use a money-weighted return instead. Entering the number of data points rather than the number of intervals is a frequent slip: values for 2020 through 2025 span 5 years, not 6. A starting value of zero or a negative value produces no meaningful rate.
Use the result for planning, then confirm taxes, fees, contract terms, and other business-specific assumptions. This is not accounting, tax, or investment advice.
How it works
Calculate compound annual growth across an investment period. This tool explains the calculation so you can adjust the assumptions to match your situation.
Worked example
With Starting value = 10000 $ · Ending value = 18000 $ · Years = 5 years → 12.47 % / year (compound annual growth rate). Change an input above and this example updates with your numbers.
Common questions
Divide the ending value by the starting value, raise the result to the power of 1 divided by the number of years, and subtract 1. Multiply by 100 for a percentage. On a phone calculator, use the x^y key with the exponent 1 ÷ years.
The growth ratio is 1.8, and 1.8^(1 ÷ 5) = 1.1247, so CAGR is 12.47% per year. Total growth over the five years is 80%. The same $10,000 would need a 6.05% CAGR to reach $18,000 in 10 years.
An arithmetic average adds each year’s return and divides by the number of years; it overstates the result when returns vary. CAGR is the geometric rate that links the start and end values, so it reflects compounding and is always equal to or lower than the arithmetic average for the same series.
No. It measures the nominal change between two values. To estimate a real rate, subtract approximate inflation, or run the calculation again with the ending value reduced by the fees and taxes you actually paid. Dividends count only if they are included in the ending value.
Yes. If the ending value is below the starting value the ratio is less than 1 and the calculated rate is negative. A fall from $10,000 to $8,000 over 5 years is a CAGR of −4.36% per year.