Calculate the compound annual growth rate between a starting and ending value.
Calculated locally in your browser.
How is CAGR calculated?
CAGR = (ending ÷ starting)^(1 ÷ years) − 1. It expresses growth as a constant yearly rate, ignoring year-to-year volatility, which makes it useful for comparing investments. For example, growing 10,000 to 26,000 over 5 years is a CAGR of about 21.06% per year — the steady rate that would produce the same result.
Understanding your result
CAGR ignores year-to-year volatility, showing the steady rate that would produce the same result — useful for comparing investments.
Formula and method
CAGR = (ending ÷ starting)^(1 ÷ years) − 1. It expresses growth as a constant yearly rate.
Assumptions and limitations
The result is an estimate for general guidance only and not investment advice. CAGR smooths away all year-to-year swings, so it hides volatility and risk and says nothing about the path taken. Past growth does not predict future results, and your actual outcome depends on fees, taxes and circumstances the tool does not model.
Worked example
Growing 10,000 to 26,000 over 5 years is a CAGR of about 21.06% per year.
How to use this tool
- Enter the starting and ending values.
- Enter the number of years.
- Press Calculate.
About the CAGR Calculator
The CAGR Calculator finds the smoothed annual rate at which an investment grew from a starting value to an ending value over a number of years.
Who should use this tool
Investors, analysts and business owners who want to express growth as a single smoothed annual rate. Useful for comparing the performance of investments, funds or revenue over different periods on a like-for-like basis, or for summarising how quickly a starting value grew to an ending value.
Benefits
- Reduces multi-year growth to one comparable annual rate
- Makes different investments easier to compare fairly
- Strips out year-to-year noise for a clean figure
- Calculates instantly and privately in your browser
Practical use cases
- Comparing the growth of two investments
- Summarising revenue growth over several years
- Checking a fund's smoothed annual return
- Presenting long-run performance in a single number
Frequently asked questions
How is CAGR different from average return?
Average return is the simple mean of yearly returns; CAGR is the compounded rate, which accounts for gains building on previous gains.
Does a high CAGR mean the investment was steady?
No. CAGR is the constant rate that would turn the starting value into the ending value over the period, but the real journey may have been volatile with big gains and losses along the way. It measures the overall result, not how smooth or risky the ride actually was.
What happens to CAGR if the ending value is lower?
If the ending value is below the starting value, CAGR is negative, showing an average annual decline rather than growth. The same formula still applies, dividing ending by starting and taking the yearly root, so it works equally for investments that shrank over the period.