CAGR Calculator
Calculate compound annual growth rate from a beginning value, ending value and time, or reverse the formula to project an ending value from an annual growth rate.
CAGR results
| Measure | Formula | Result |
|---|
CAGR formula
CAGR = (ending value ÷ beginning value)1 ÷ years − 1. Multiply the decimal result by 100 to express it as a percentage.
The reverse formula is ending value = beginning value × (1 + CAGR)years. CAGR is the constant annual rate that links two values mathematically; it does not mean the value changed smoothly every year.
Verified examples
| Inputs | Calculation | Result |
|---|---|---|
| $10,000 beginning; $18,000 ending; 5 years | (18,000 ÷ 10,000)1/5 − 1 | 12.4746% CAGR |
| $10,000 beginning; 12% annual growth; 5 years | 10,000 × 1.125 | $17,623.42 ending value |
| 100 beginning; 60 ending; 4 years | (60 ÷ 100)1/4 − 1 | −11.9888% CAGR |
For the first example, a 12% target implies an ending value of $17,623.42. The actual $18,000 ending value is $376.58 above that target path.
How to interpret CAGR
CAGR converts a start-to-finish change into one equivalent compounded annual rate. It is useful for comparing growth across investments, revenue, users, prices or other positive starting values over different time spans.
CAGR hides volatility and the path between the endpoints. Two series can have the same CAGR even when one rises steadily and the other fluctuates sharply. Use the underlying yearly data when risk or consistency matters.
Input limits and assumptions
- Beginning value must be greater than zero. Ending value may be zero but cannot be negative.
- Values accept up to two decimal places and cannot exceed 1,000,000,000,000. Every value must use the same currency or unit.
- Time must be greater than zero and no more than 1,000 years, with up to six decimal places.
- Annual and target rates range from −100% to 1,000% and accept up to four decimal places.
- Calculated results above 1,000,000,000,000,000 are rejected as outside the reliable display range.
- No deposits, withdrawals, dividends or intermediate cash flows are included. Use IRR or XIRR for irregular cash flows.
- CAGR is not an arithmetic average, forecast, guarantee or measure of risk.
A high historical CAGR can be driven by a very low beginning value or unusual endpoints. Check the full series and whether the selected dates are representative.
Frequently asked questions
Is CAGR the same as average annual growth?
No. CAGR uses compounding and only the beginning value, ending value and elapsed time. The arithmetic average of yearly growth rates can differ, especially when annual changes are volatile.
Can CAGR be negative?
Yes. If the ending value is below the beginning value, CAGR is negative. An ending value of zero produces −100% CAGR.
Is CAGR the same as compound interest?
The mathematics are related, but CAGR derives the annual rate from two observed values. A compound-interest calculation starts with an assumed rate and may include compounding frequency and contributions.
Related calculators
- ROI Calculator — include investment costs, proceeds and income before annualizing return.
- Compound Interest Calculator — model compounding frequency and recurring contributions.
- Percentage Calculator — calculate nonannualized percentage change.
- Sustainable Growth Rate Calculator — estimate internally supportable corporate growth.