CAGR Calculator

Find the smoothed annual growth rate between two values.

How CAGR works

Compound annual growth rate (CAGR) is the smoothed, constant annual rate a value would need to grow at to go from its beginning value to its ending value over a stated period — the standard way to compare growth across investments, revenue lines, or metrics with different starting points and time horizons.

Enter the beginning value, the ending value, and the number of years between them. The calculator returns the CAGR as a percentage.

CAGR smooths out year-to-year volatility into a single average rate — it describes the overall trend, not what happened in any individual year along the way.

The formula

CAGR = (Ending value ÷ Beginning value)^(1 ÷ years) − 1

Divide the ending value by the beginning value, raise the result to the power of 1 divided by the number of years, then subtract 1. Multiply by 100 to express as a percentage.

Worked example

$1,000 growing to $2,000 over 3 years

(2,000 ÷ 1,000)^(1/3) − 1 = 2^0.333 − 1 ≈ 0.2599, or about 25.99% CAGR.

Frequently asked questions

Is CAGR the same as the average of yearly growth rates?

No — CAGR is a compounded (geometric) rate, which correctly accounts for compounding. A simple average of yearly percentage changes can overstate growth when returns are volatile.

Does CAGR predict future growth?

No — it describes the historical smoothed growth rate between two known points. Past CAGR is not a guarantee of future performance.

What if the ending value is lower than the beginning value?

CAGR will be negative, correctly reflecting a decline over the period.

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