CAGR Calculator
Find the compound annual growth rate — the steady yearly rate that turns a beginning value into an ending value over time. It works for a portfolio, but also for revenue, users, or any metric with a start and an end.
Your CAGR will appear here
Enter a beginning value, ending value, and number of years, then click calculate.
CAGR vs. our ROI Calculator
ROI shows your total return on a buy-and-sell investment. CAGR shows the yearly growth rate of any single metric — revenue, users, a portfolio — over multiple years, even with no investment context at all. If you're pricing a classic buy-and-sell with costs and dividends, use our ROI Calculator instead.
Quick Answer
CAGR = (Ending Value / Beginning Value)^(1/n) - 1, expressed as a percentage. A value that grows from $10,000 to $19,000 over 5 years has a CAGR of about 13.70% per year. Because CAGR is geometric, it reflects compounding and won't be fooled by up-and-down swings the way a simple average is.
How It Works: Formula & Variables
CAGR = (Ending Value / Beginning Value)^(1/n) − 1
- Beginning Value
- The starting amount at the beginning of the period.
- Ending Value
- The value at the end of the period.
- n (years)
- The number of years between the start and the end, not the count of data points. Yearly figures for 2019–2024 span 5 years, not 6.
The result is multiplied by 100 to show it as a percentage per year.
Worked Examples
Example 1: $10,000 to $19,000 over 5 years
The ratio is 19,000 / 10,000 = 1.9. Taking the fifth root, 1.9^(1/5) ≈ 1.13697, so CAGR = 0.13697, or about 13.70% per year.
Example 2: why +25% then −25% is not zero
Start with $1,000. A +25% year takes it to $1,250, then a −25% year drops it to $937.50. Averaging +25% and −25% suggests no change, but the CAGR over the whole period is (937.50 / 1,000)^(1/2) − 1 ≈ −3.18% per year. Because CAGR is geometric and folds in compounding, it catches the real loss that a simple arithmetic average completely misses.
Key Concepts
CAGR is geometric, not arithmetic: It multiplies growth across periods instead of averaging it, which is why volatile returns pull the true rate below a simple mean.
It smooths out the ride: CAGR reports one steady rate as if growth were constant, so it's a clean summary but hides how bumpy the path actually was.
It works far beyond investing: Revenue, user counts, GDP — anything with a start value and an end value over time can be measured the same way.
Common Mistakes
Counting the periods wrong: n is the number of years between the start and the end, not the number of data points. 2019 through 2024 is 5 years, not 6.
Treating CAGR as ROI: ROI ignores time entirely, while CAGR converts a total return into a yearly rate — they answer different questions.
Assuming CAGR accounts for deposits and withdrawals: It only looks at the beginning and ending values, so any money added or taken out along the way isn't captured.
Frequently Asked Questions
CAGR is the compound annual growth rate — the average yearly rate at which a beginning value grows into an ending value over a number of years, assuming it compounded steadily the whole way.
A simple average just adds the yearly returns and divides by the count. CAGR is geometric, so it accounts for compounding and isn't thrown off by big swings within the period. That's why a year of +25% followed by a year of -25% averages to zero but actually leaves you with a negative CAGR.
ROI is your total return with no time dimension attached, while CAGR (or annualized return) converts that total into a yearly pace. Our own ROI Calculator describes annualized ROI and CAGR as close cousins, because for a single buy-and-sell they work out to essentially the same figure.
Yes. Whenever the ending value is below the beginning value, the CAGR comes out negative — for example $1,000 falling to $937.50 over two years is about -3.18% a year.
No. The math is identical for anything with a start and end value over time — revenue, user counts, GDP, subscribers. Any series with a beginning value and an ending value can be run through the same formula.
CAGR assumes smooth, constant growth, so it hides the volatility inside the period and says nothing about the bumps along the way. It also ignores any money added or withdrawn between the start and the end.
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