CAGR calculator
Average annual growth rate between two values.
Fill in the fields and the result will appear here automatically.
The compound annual growth rate spreads total growth evenly across the period, so a five-year doubling reads as one annual figure instead of a lump sum. It makes investments of different lengths comparable. Use positive endpoints on one currency and valuation basis: a balance increase from contributions is not entirely investment return. CAGR describes the endpoints and does not promise the same future growth.
How it works
Formula and logic
CAGR = [(ending/starting)^(1/years)−1]×100%. Overall growth = (ending/starting−1)×100%. Fractional years are used directly, without rounding to months. Both values must be positive; a decline to a positive value gives a negative CAGR. It is an equivalent constant rate, rather than the arithmetic mean of unknown yearly returns.
Example
Growing from 100,000 to 200,000 monetary units over five years gives 14.87% annually and 100% overall. Falling from 200,000 to 100,000 over four years gives −15.91% annually. Equal positive endpoints give CAGR 0%.
Fields and units
- Starting value — $
- Ending value — $
- Number of years — years
How to use
- — Enter positive starting and ending values in one currency.
- — Supply a positive duration in years; 18 months is 1.5 years.
- — Compare overall growth with annual growth; they measure different spans.
- — If money was added or withdrawn, use a cash-flow return method.
Method and limitations
- Calculation method
- Formula and logic
- Data or methodology source
- Microsoft RRI: equivalent rate between starting and ending values Microsoft XIRR: a separate return method for dated cash flows
- Limitation
- Growth between two positive endpoints. Contributions, withdrawals, fees, taxes, currency changes and inflation are not separated automatically; risk history and future returns are not determined.
FAQ
Why not just divide total growth by years?
That ignores compounding. Doubling over five years is 14.87% a year, not 20% — each year grows on top of the previous one.
Can CAGR be negative?
Yes. A decline gives a negative annual rate, which is the honest way to describe a shrinking value.
Does it show volatility?
No. CAGR is a smoothed average — two investments with the same start, end and duration share a CAGR however differently they moved in between.
What if the period is not whole years?
Enter fractional years. Eighteen months is 1.5.
Why do account contributions distort investment CAGR?
The ending balance includes added money, but this calculator has no cash-flow inputs. Dated contributions and withdrawals need a cash-flow method such as XIRR; endpoint CAGR alone does not identify the investment return.