CAGR Calculator

CAGR — Compound Annual Growth Rate — is the average yearly growth rate of an investment or metric over a specific period, assuming smooth compounding. Investors use CAGR to compare investments with different time horizons, benchmark performance against indexes, and set realistic growth expectations. This calculator finds CAGR from any beginning and ending value, or reverse-calculates target values from a known growth rate.

✓ Select a mode, enter values, and click Calculate

Calculation Mode

Time Period

years months

Click "Calculate" to see your results.

What Is CAGR?

CAGR stands for Compound Annual Growth Rate. It measures the mean annual growth rate of an investment (or any measurable value) over a period longer than one year. Unlike simple averages, CAGR accounts for the effect of compounding — where gains build on previous gains.

Real-world investments are volatile — they might rise 25% one year and fall 10% the next. CAGR smooths out that volatility and tells you what the equivalent steady annual growth rate would have been to produce the same end result.

Why investors use CAGR: it's the fairest way to compare investments with different time horizons. A stock that returned 100% over 10 years (CAGR: ~7.2%) performed very differently from one that returned 100% over 3 years (CAGR: ~26%). Total return alone doesn't capture this — CAGR does.

CAGR Formula

CAGR = ((EV / BV)^1/Years − 1) × 100

EV= Ending Value

BV= Beginning Value

Years= number of years in the period

1/Years= exponent converting total growth to an annual rate

Find Ending Value

EV = BV × (1 + CAGR/100)^Years

Project future value from a known growth rate.

Find Beginning Value

BV = EV / (1 + CAGR/100)^Years

Find what starting amount would reach a target.

CAGR Examples

Investment Growth

$10,000 grows to $15,000 over 5 years.

Beginning Value	$10,000
Ending Value	$15,000
CAGR	8.45%
Total Growth	50.00%

Revenue Growth

Revenue grows from $2M to $5M over 3 years.

Beginning Value	$2,000,000
Ending Value	$5,000,000
CAGR	35.72%

Reverse CAGR

$20,000 at 10% CAGR for 7 years.

Beginning Value	$20,000
CAGR	10%
Ending Value	$38,974

$20,000 × (1.10)^7 = $38,974.13

CAGR vs ROI

ROI tells you the total percentage return over the entire holding period: ROI = ((Ending − Beginning) / Beginning) × 100. CAGR tells you the annualized growth rate — what steady yearly rate would produce the same end result.

Metric	$10,000 → $15,000 over 5 years
ROI	50% (total, regardless of time)
CAGR	8.45% (per year, annualized)

When to use which: use ROI for total gain on a single investment. Use CAGR when comparing investments with different time horizons — it's the more useful metric for most comparisons because it normalizes for time.

Frequently Asked Questions

Common questions about CAGR and compound annual growth rate.

What is a good CAGR?

It depends on asset class and time period. The S&P 500 has historically delivered roughly 10% CAGR long-term. Individual stocks at 15-25% CAGR over 5+ years is considered strong. Real estate typically sees 3-5% CAGR in appreciation.

Is CAGR the same as annualized return?

Yes, for practical purposes. Both express the average yearly growth rate that would take a beginning value to an ending value, assuming smooth compounding. The terms are used interchangeably in most contexts.

What is the difference between CAGR and ROI?

ROI measures total percentage return over the entire period without accounting for time. CAGR converts that total return into an equivalent annual rate — making it far more useful for comparing investments held for different durations.

Can CAGR be negative?

Yes. CAGR is negative when the ending value is lower than the beginning value. A CAGR of -100% means a total loss (ending value of $0).

Does CAGR include contributions or dividends?

No. Standard CAGR only looks at beginning and ending values — it does not account for additional contributions, withdrawals, or dividend reinvestments made during the period. For investments with regular contributions, use an IRR calculator or our Investment Return Calculator instead.

How is CAGR different from average annual return?

Average annual return is a simple arithmetic average of yearly returns. CAGR is geometric (compounded). If an investment gains 50% then loses 50%, the arithmetic average is 0% — but you actually lost 25% of your money. CAGR correctly reflects this real outcome.

Can I use CAGR for non-financial metrics?

Absolutely. CAGR works for any metric that grows over time — revenue, customers, users, market size, production output.