CAGR Calculator
A portfolio, a revenue line, a user count — anything with a value at two dates has a compound annual growth rate: the smooth yearly percentage that would connect the endpoints. Enter the start value, end value, and years between them; fractional years are fine. The rate deliberately ignores everything between the two dates — that is what makes it comparable across investments of different lengths, and also what it hides, as the notes below show.
Compound annual growth rate
Example: 10,000 growing to 16,000 over 5 years is 9.86% per year.
The geometry behind the rate
CAGR% = ((end ÷ start)1 ÷ years − 1) × 100 — the geometric mean growth per year. In the example, 10,000 → 16,000 is 60% of total growth, and the fifth root of that growth ratio gives 9.86% per year (both numbers computed at build time by the tested engine behind the form). Naively dividing 60% by five would claim 12% a year — wrong, because each year's growth compounds on the last.
CAGR vs. "average return": the volatility tax
The arithmetic average of yearly returns and the CAGR agree only when every year is identical. Take a value that gains 50% one year and loses 30% the next: the average says +10% a year, but 100 becomes 150 and then 105 — a CAGR of just 2.47%. Whenever a track record is quoted as an average of good and bad years, the compound rate is the one your money actually experienced, and it is always the smaller of the two for a volatile series.
Same CAGR, very different rides
Because CAGR sees only the endpoints, it cannot tell a smooth climb from a crash and a scramble back. Two portfolios both start at 10,000 and both end at 16,000 five years later, so both report exactly 9.86% a year. The first compounds quietly at that rate the whole way. The second falls to 6,000 in year one — a -40% drawdown — and must then climb from 6,000 to 16,000 in the four years that remain, which the same formula prices at 27.79% a year, sustained for four straight years. Identical CAGR, but the second investor spent a year staring at a large loss and then needed a run of exceptional returns. Anyone who would have sold at the bottom never earns the smoothed rate — worth remembering whenever a track record arrives as one tidy percentage.
When the measurement window is too short
The formula will annualize any period, including ones far too short to support an annual claim. Take a user base that grows from 1,000 to 1,500 in one quarter — real growth of 50%. Entered with 0.25 years, the arithmetic reports 406.25% per year, because it assumes the quarter's pace repeats, with compounding, for four quarters running. Nothing grows on that schedule for long. The figure is not a mistake; it is an extrapolation dressed up as a measurement. A practical rule: growth measured over less than a year is a projection to challenge, not a rate to report — and even one- or two-year CAGRs deserve suspicion, since a single unusual year dominates a window that short.
Comparing investments that ran for different lengths
Total growth cannot compare a three-year investment with a six-year one; CAGR can, because it puts both on a per-year footing. Turning 10,000 into 15,000 over three years is 50% in total; turning 10,000 into 19,000 over six years is 90%. The longer investment wins on total growth, yet the shorter one compounded faster — 14.47% a year against 11.29%. Which number should decide depends on what happens next: if the capital can be redeployed at a similar pace, the faster compounder does more work per year; if the realistic alternative is idle cash, six years at 11.29% may still be the better outcome. For the money-in, money-out framing of a single deal, the ROI calculator shows total and annualized return side by side.
Which tool: CAGR or ROI?
They meet in the middle. Start from money invested and money received, and the ROI calculator is the natural framing — its annualized option is precisely a CAGR. Start from a value observed at two dates, as with a chart or a revenue series, and CAGR is the direct route. For a single change between two values with no time dimension — last month's price against this month's — the price change calculator reports the move in both directions.
Frequently asked questions
What does CAGR actually tell me?
The single steady yearly rate that would carry the start value to the end value in the given time. Growing 10,000 into 16,000 over five years is a CAGR of 9.86%: apply 9.86% five times in a row and you land on 16,000, even if the real path was anything but steady.
Why is CAGR lower than the average of the yearly returns?
Because losses cost more ground than equal-sized gains recover. A value that rises 50% then falls 30% averages +10% a year arithmetically, yet ends only 5% up — a CAGR of 2.47%. The gap between the two numbers is the price of volatility, and it is why quoting average returns flatters a bumpy series.
Can CAGR be negative?
Yes — when the end value is below the start value, the connecting yearly rate is negative. A decline from 200 to 150 over three years has a well-defined negative CAGR; the formula only breaks down at zero, which is why both values must be above it.
Does CAGR account for deposits and withdrawals?
No. CAGR sees two endpoints and the clock — nothing in between. If money was added along the way, the end value is inflated by contributions rather than growth, and the CAGR overstates performance. Strip flows out first, or use a money-weighted measure.
Can I use a period that is not a whole number of years?
Yes — 2.5 years, 18 months (1.5), even 0.75 work fine, because the formula takes a fractional exponent. Just measure the period in years, since the "A" in CAGR fixes the unit of the answer.
Is a CAGR measured over a few months meaningful?
Rarely, if quoted as an annual rate. Growing 1,000 users to 1,500 in a quarter of a year is 50% of real growth, but entered as 0.25 years the formula annualizes it to 406.25% — it assumes the quarter's compounding pace holds for a full year. Report the period's actual growth and treat the annualized figure as a projection, not a measurement.
How does CAGR relate to the rule of 72?
The rule of 72 estimates doubling: divide 72 by the yearly rate to get the years, or by the years to get the rate. CAGR is the exact version. Doubling in 10 years is 7.18% a year against the rule's 7.2%; doubling in 3 years takes 25.99% against the rule's 24%. The shortcut drifts as rates climb — use it for intuition and the formula for answers.
Values are computed on your device and never transmitted. CAGR is a descriptive statistic of two endpoints — it is not a forecast, and this page offers no investment advice. Formula details: methodology.