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CAGR Calculator
Work out the steady yearly growth rate that would take a starting value to an ending value over a set period. Enter the initial value, the final value and the number of years to get the compound annual growth rate (CAGR) and the total change.
Private by design · Inputs and downloads stay in your browser
Changes the currency symbol and number format only. Amounts are not converted.
CAGR smooths growth over time and does not describe yearly fluctuations or interim cash flows.
How to use the CAGR Calculator
- Enter the initial value, for example what an investment was worth at the start.
- Enter the final value at the end of the period.
- Enter the period in years. Fractions are allowed, for example 3.5.
- Select Calculate to see the CAGR as a percentage, along with the absolute growth or loss.
Use the currency selector above the inputs to change the symbol. It changes the display only and does not convert amounts.
What is CAGR?
Compound annual growth rate is the single yearly rate that, compounded, would turn the beginning value into the ending value over the period. It smooths an uneven journey into one comparable figure.
That makes CAGR handy for comparing investments held for different lengths of time. It is not the same as the simple average of yearly returns, which ignores compounding.
How the calculation works
CAGR formula
CAGR = (Final value ÷ Initial value)^(1 ÷ years) − 1
- Final value is the value at the end of the period.
- Initial value is the value at the start.
- years is the length of the period.
The result is multiplied by 100 to show a percentage. A final value below the initial value gives a negative CAGR.
CAGR calculation example
A holding that grows from 100,000 to 200,000 in 5 years:
| Initial value | 100,000 |
|---|---|
| Final value | 200,000 |
| Period | 5 years |
| CAGR | 14.8698% |
|---|---|
| Total growth | 100,000 |
Doubling in five years needs a little under 15% a year, compounded. Amounts are shown without a currency symbol because the arithmetic is identical in any currency. The currency selector only changes the symbol and number format; it never converts amounts.
Assumptions and limitations
Assumptions
- There is exactly one starting value and one ending value.
- No money is added or withdrawn during the period.
- Growth is treated as smooth and compounded annually.
Limitations and why results can differ
- CAGR says nothing about the ups and downs between the two dates, so two very different paths can share one CAGR.
- It cannot handle several deposits or withdrawals. For dated cash flows use the XIRR Calculator.
- Past growth does not indicate future growth, and fees or taxes are included only if they are already reflected in the values you enter.
Frequently asked questions
How is CAGR different from an average annual return?
An average of yearly returns ignores compounding, while CAGR is the single constant rate that reproduces the final value from the initial value.
Can CAGR be negative?
Yes. If the final value is lower than the initial value, the CAGR is negative.
What if I made several investments over time?
CAGR assumes one initial value with no cash flows in between. Use the XIRR Calculator for dated investments and withdrawals.
Does CAGR show volatility?
No. It describes the smoothed rate only, not the swings along the way.
Methodology
Inputs are validated: initial and final values from 0.01 to 1,000,000,000,000 and a period from 0.01 to 100 years. Zero and negative values are rejected because a growth rate cannot be defined for them.
CAGR is computed as the exponential of the natural log of the value ratio divided by the years, minus one, which is mathematically the same as raising the ratio to the power 1 ÷ years and subtracting one but is numerically stable for large ratios. The percentage is displayed to up to four decimals. The calculation runs in your browser and inputs are not sent to a server.
Last reviewed:
Disclaimer
Results are estimates based on the assumptions you enter and do not guarantee future returns. This page is for information only and is not financial, investment or tax advice. Read the full Disclaimer.
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This tool is part of Investing and Saving.
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