CAGR Calculator
Calculate CAGR (compound annual growth rate) from a starting value, ending value and number of years.
How to use the CAGR calculator
- Enter the starting value (e.g. an investment's value at the start).
- Enter the ending value (its value today or at the end of the period).
- Enter the number of years between the two values.
- The compound annual growth rate (CAGR) updates automatically.
What is CAGR?
CAGR (Compound Annual Growth Rate) shows how much something has grown per year on average, as if the growth had been smooth and compounded every year. CAGR gives a more accurate picture of the growth rate than simply dividing total growth by the number of years, because it accounts for the effect of compounding. The formula is CAGR = (ending value / starting value)^(1/years) − 1.
Frequently asked questions
What's the difference between CAGR and average annual return?
A simple average of annual returns can be misleading with fluctuating returns, since it doesn't account for the order of returns or the compounding effect. CAGR instead calculates the steady growth rate that would actually have produced the same end result.
Why use CAGR instead of total percentage growth?
Total percentage growth doesn't tell you anything about the time period — 100% growth over 10 years is very different from 100% over 1 year. CAGR normalizes growth to an annual rate, making it easier to compare investments across different time periods.
Can CAGR be negative?
Yes — if the ending value is lower than the starting value, CAGR becomes negative, showing an average annual decline instead of growth.