CAGR Calculator
Find the compound annual growth rate between two values, the steady yearly return that gets you from start to finish. Or flip it: solve for the ending value or the years needed.
per year for 10 years
| Year | Value on the CAGR path |
|---|---|
| 0 | $10,000 |
| 1 | $10,700 |
| 2 | $11,449 |
| 3 | $12,251 |
| 4 | $13,108 |
| 5 | $14,026 |
| 6 | $15,008 |
| 7 | $16,058 |
| 8 | $17,182 |
| 9 | $18,385 |
| 10 | $19,672 |
Ask about your numbers
Get a plain-English read of the result above: what drives it, what to try changing. It sends only the numbers in this calculator and your question. Educational only, not financial advice.
Why the average return lies
Suppose a fund gains 20% one year and loses 20% the next. The average return is 0%. But $10,000 goes to $12,000, then down to $9,600. You lost money. This “volatility drag” is why CAGR, not the average, is the honest number.
CAGR formula and example
CAGR = (End ÷ Start)1/years − 1
An investment grows from $25,000 to $40,000 in 6 years. 40,000 ÷ 25,000 = 1.6; 1.61/6 = 1.0815; CAGR = 8.15% a year. Check: 25,000 × 1.08156 ≈ 40,000.
When to use CAGR
- Comparing two funds’ performance over the same period.
- Describing company revenue or earnings growth in reports.
- Turning a total ROI into a yearly figure.
CAGR looks backwards. To project forward from a rate, use the future value calculator, or for a quick doubling-time estimate, the Rule of 72.
Questions people ask
What is CAGR?
Compound annual growth rate is the constant yearly rate that would take a starting value to an ending value over a given number of years. It smooths out the ups and downs into a single comparable number.
What is the CAGR formula?
CAGR = (ending value ÷ beginning value)^(1 ÷ years) − 1. From $10,000 to $19,672 in 10 years: (1.9672)^(0.1) − 1 = 7.0%.
Why is CAGR lower than the average annual return?
Because losses hurt more than equal gains help. +50% followed by −50% averages 0%, but $100 becomes $150 then $75, a CAGR of −13.4%. The more volatile the returns, the bigger the gap between arithmetic average and CAGR.
Is CAGR the same as annualized return?
Yes, for a single investment with no deposits or withdrawals in between. With cash flows during the period, use a money-weighted return such as IRR instead.
Can I calculate CAGR for revenue or users?
Yes. CAGR works for any quantity that grows over time: company revenue, subscribers, population, home prices. Just enter the start and end values and the number of years.