CAGR stands for Compound Annual Growth Rate. It is the rate at which an investment or metric would need to grow each year, compounded, to reach the ending value from the beginning value over the given number of years. It represents a smoothed average that eliminates year-to-year volatility.

What is the CAGR formula?

CAGR = (Ending Value / Beginning Value) ^ (1 / Number of Years) − 1. The result is expressed as a percentage. For example, growing from $1,000 to $1,610 over 5 years gives a CAGR of (1610/1000)^(1/5) − 1 ≈ 10.0%.

What is the difference between CAGR and average annual return?

The average annual return is the arithmetic mean of yearly returns, while CAGR is the geometric mean — it accounts for compounding. CAGR is always equal to or lower than the average annual return when returns vary, and it better reflects the actual investor experience.

Can CAGR be negative?

Yes. If the ending value is lower than the beginning value, CAGR will be negative, indicating the investment or metric declined each year on a compounded basis.

What are the limitations of CAGR?

CAGR assumes a constant growth rate and ignores year-to-year volatility. It does not account for the risk taken, dividends reinvested, or cash flows during the period. It should be used alongside other metrics like standard deviation or IRR for a fuller picture.

Can I use CAGR for non-financial metrics?

Absolutely. CAGR is widely used to measure growth in revenue, user counts, website traffic, population, and any other metric that grows over time. As long as you have a beginning value, ending value, and a number of years, CAGR applies.

How do I calculate CAGR in Excel?

Use =(End/Start)^(1/Years)-1 and format the cell as a percentage, or the built-in =RRI(Years, Start, End). Both give 14.87% for $10,000 growing to $20,000 in 5 years.

How do I find CAGR for a period in months?

Convert months to years first: 18 months is 1.5 years. This calculator accepts decimal years, so enter 1.5. Growth from $100 to $130 over 18 months is a CAGR of about 19.11%.

CAGR Calculator

Enter a beginning value, ending value, and number of years to instantly calculate the Compound Annual Growth Rate and see a year-by-year breakdown.

CAGR = (ending value ÷ beginning value)^(1 ÷ years) − 1.

Growth Inputs

Beginning Value

The starting amount of your investment or metric.

Ending Value

The final amount after the growth period.

Number of Years

Duration of the investment period. Decimals allowed (e.g. 2.5).

Enter values on the left to calculate CAGR.

Compound Annual Growth Rate

0.00%

Total Growth

Total Gain / Loss

Ending Value

Year-by-Year Projection

Year	Value	Growth

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Quick answer

CAGR = (ending value ÷ beginning value)^(1 ÷ years) − 1. It is the steady yearly rate that turns the start value into the end value. $10,000 that grows to $20,000 in 5 years has a CAGR of 14.87%.

Examples

Start	End	Years	CAGR
$10,000	$20,000	5	14.87%
$10,000	$20,000	10	7.18%
$50,000	$80,000	3	16.96%
$1,000,000	$3,000,000	10	11.61%
$10,000	$8,000	4	−5.43%

Enter start, end and years.

Summary

The CAGR Calculator computes the Compound Annual Growth Rate — the steady annual rate at which an investment would have grown from a beginning value to an ending value over a given time period. It smooths out volatility to give a single representative growth figure. Use it to compare investments, evaluate business revenue growth, or benchmark portfolio performance against indices.

How it works

Enter the beginning value (the starting amount of your investment or metric).
Enter the ending value (the final amount after the growth period).
Enter the number of years over which the growth occurred.
Click Calculate — or results update automatically as you type.
Read the CAGR percentage and review the year-by-year projection table.
Use the copy button to copy the CAGR result to your clipboard.

Use cases

Evaluating the annual return on a stock or mutual fund over multiple years.
Measuring revenue or profit growth for a business over time.
Comparing two investments that grew over different time horizons.
Benchmarking portfolio performance against market indices.
Projecting future value if growth continues at the same rate.
Analyzing real estate appreciation on a property.
Tracking user base or subscriber growth for a SaaS company.
Presenting consistent growth figures in investor reports.

Frequently Asked Questions

Last updated: 2026-05-23 · Reviewed by Nham Vu