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CAGR Calculator: Compound Annual Growth Rate

Enter the starting value, the ending value and the number of years to get the steady yearly growth rate that links them.

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Formula

CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1

Total growth is ending ÷ starting − 1. The starting value must be above zero and the number of years above zero.

Worked example

An investment grows from 10,000 to 25,000 in 5 years:

  • 25,000 ÷ 10,000 = 2.5
  • 2.5^(1 ÷ 5) = 1.2011
  • CAGR is 20.11% a year and total growth is 150%.

Frequently asked questions

What is CAGR?

Compound annual growth rate is the single yearly rate that would take a starting value to an ending value over a period, with growth compounding each year.

What is the CAGR formula?

CAGR = (ending ÷ starting)^(1 ÷ years) − 1. For 10,000 growing to 25,000 in 5 years, 2.5^0.2 − 1 = 20.11% a year.

Can CAGR be negative?

Yes. If the value falls, the rate is negative. A value that halves in 2 years has a CAGR of −29.29%.

Why not just divide the total growth by the years?

That average ignores compounding. 150% total growth over 5 years is 20.11% a year compounded, not 30%. CAGR also hides ups and downs along the way.

How we calculate

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