Skip to main content

CAGR Calculator

Calculate
Enter a start value, end value, and time period to find the compound annual growth rate.

Enter values to see the result.

What is CAGR?

CAGR (Compound Annual Growth Rate) measures the average annual rate at which an investment grows over a period, smoothing out year-to-year changes. It tells you the single steady rate that would take a starting value to an ending value over a given number of years, assuming profits are reinvested. For example, if you invested $10,000 and it grew to $15,000 over 5 years, your CAGR is about 8.45%, even though the actual annual returns may have varied significantly.

How is CAGR calculated?

The CAGR formula takes three inputs and produces a single annualized growth rate:

CAGR equals open parenthesis End Value divided by Start Value close parenthesis raised to the power of 1 divided by Years, minus 1

Example: $10,000 to $15,000 over 5 years

CAGR equals open parenthesis 15,000 divided by 10,000 close parenthesis raised to the power of 1 divided by 5, minus 1, equals 1.5 raised to 0.2 minus 1, equals 8.45%

Tip: If you have dates instead of a year count, convert them to fractional years. For example, January 2018 to July 2025 is 7.5 years. The calculator above accepts fractional values in the "Number of Years" field.

CAGR vs other return metrics

Metric Accounts for Best used for
CAGR Compounding over time Comparing investments over different time periods
Simple Return Total gain/loss only Quick snapshot of overall profit or loss
ROI (Return on Investment) Total gain relative to cost Evaluating a single project or expenditure
IRR (Internal Rate of Return) Compounding + irregular cash flows Investments with multiple deposits or withdrawals

Worked examples

Index fund over 10 years

Start Value: $25,000 · End Value: $64,844 · Years: 10

CAGR = ($64,844 / $25,000)1/10 − 1 = 10.00%

An initial investment of $25,000 that grew to $64,844 over a decade compounded at exactly 10% per year.

Real estate investment over 15 years

Start Value: $200,000 · End Value: $450,000 · Years: 15

CAGR = ($450,000 / $200,000)1/15 − 1 = 5.56%

A property bought for $200,000 that appreciated to $450,000 over 15 years grew at a compound rate of about 5.6% annually.

Company revenue growth over 6 years

Start Value: $500M · End Value: $1.2B · Years: 6

CAGR = ($1.2B / $500M)1/6 − 1 = 15.71%

CAGR works for any metric that changes over time. Here, a company's revenue grew from $500 million to $1.2 billion at a compound rate of about 15.7% per year.

Bond portfolio with modest growth

Start Value: $50,000 · End Value: $58,000 · Years: 5

CAGR = ($58,000 / $50,000)1/5 − 1 = 3.01%

A bond portfolio that grew from $50,000 to $58,000 in five years compounded at about 3% annually.

Investment that lost value

Start Value: $12,000 · End Value: $8,500 · Years: 3

CAGR = ($8,500 / $12,000)1/3 − 1 = −10.86%

A negative CAGR shows the investment declined. Here, $12,000 shrank to $8,500 over 3 years at an equivalent rate of −10.86% per year.

Frequently Asked Questions

Can CAGR be negative?
Yes. A negative CAGR means the investment lost value over the period. For example, if $10,000 fell to $7,000 over 5 years, the CAGR would be approximately −6.9%.
What's the difference between CAGR and average annual return?
Average annual return is a simple arithmetic mean of yearly returns, which can overstate actual growth when returns are volatile. CAGR gives the single geometric rate that produces the actual ending value, making it more accurate for measuring long-term performance.
How do I calculate CAGR between two dates?
Convert the date range into fractional years (for example, 3 years and 6 months = 3.5 years) and use the standard formula. Our calculator above accepts fractional years in the "Number of Years" field.
Is CAGR the same as compound interest?
Not exactly. Compound interest describes an ongoing process where interest is reinvested over time. CAGR measures the equivalent annual growth rate after the fact. CAGR tells you what compound interest rate would have produced the same result. If you want to project forward from a rate and a time horizon (instead of back-solving a rate from two values), use our compound interest calculator.
Does CAGR account for inflation?
Not by default. Standard CAGR does not account for inflation. To get an inflation-adjusted CAGR, subtract the average inflation rate or use our calculator's "Adjust for inflation" option, which adjusts the rate to show your real purchasing-power growth.
What are the limitations of CAGR?
CAGR smooths out volatility, so it hides how bumpy the ride was. It also ignores intermediate cash flows (deposits or withdrawals). For investments with irregular contributions, Internal Rate of Return (IRR) is a better metric.
Is a 10% CAGR typical?
A 10% nominal CAGR is roughly in line with the S&P 500's long-term historical average. Any figure is context-dependent: it only has meaning alongside the time period, the risk taken, and inflation. After adjusting for inflation, the long-run real return on that same series is closer to 7%. Past performance does not predict future results.
Can I use CAGR for non-investment metrics?
Absolutely. CAGR is widely used to measure revenue growth, population growth, GDP growth, and any metric that changes over time. The formula works the same regardless of what you are measuring.

Related calculators

Compound Interest Calculator

Use CAGR when you already know the start and end values and want the rate. Use compound interest when you know the rate and time horizon and want to project the final balance, with optional regular contributions.