CAGR calculator
Enter a beginning value, an ending value, and the number of years to find the constant annual rate that connects them.
Result
Compound annual growth rate
14.87%
- Total growth
- 100.00%
- Number of years
- 5.00
- Ending value
- $20,000.00
How to calculate it
CAGR = (ending value / beginning value)^(1 / years) − 1
CAGR smooths growth into a single compounded annual rate. It does not mean the value actually grew at that rate every year. It is useful for comparing changes across different time spans when no additional money enters or leaves the investment.
Reference: Investor.gov: compound interest.
Worked example
A value that grows from 10,000 to 20,000 over five years has 100% total growth and 14.87% CAGR. Using 100% ÷ 5 = 20% ignores the effect of compounding.
Assumptions and limits
- The beginning value and time must be greater than zero. The ending value can be zero, which represents a total loss and a CAGR of −100%.
- Decimal years are allowed. For 18 months, enter 1.5 years. Use the same unit and currency for both values.
- Deposits and withdrawals distort an endpoint-only investment return. Use the IRR calculator when you have intermediate cash flows. CAGR does not measure volatility or investment risk.
Results use unrounded inputs and normally display two decimal places. Very small or large numbers may use scientific notation. Use consistent currency units; no currency conversion is applied.
Common questions
Can CAGR be negative?
Yes. When the ending value is lower than the beginning value, CAGR is negative. A value falling from 100 to 80 over three years has a CAGR of about −7.17%.
Is CAGR the same as IRR?
They agree for one initial investment and one final receipt with no intermediate cash flows. IRR can account for multiple cash flows; CAGR uses only the beginning and ending values.