CAGR Calculator
Work out the compound annual growth rate between a starting and ending value.
Content updated July 1, 2026
CAGR is the steady yearly rate that would grow your starting value to the ending value — a clean way to compare returns across different periods.
CAGR — compound annual growth rate — is the smooth, steady yearly rate that would take a starting value to an ending value over a set number of years. It strips out the bumps of real life to give one clean growth figure, which is why investors and analysts rely on it.
Enter your beginning value, ending value, and the number of years to get the CAGR, along with the total growth over the whole period.
The CAGR formula
CAGR = (Ending value ÷ Beginning value)^(1 ÷ years) − 1Ending value = the value at the end of the period · Beginning value = the value at the start · years = the number of years between them. Multiply the result by 100 for a percentage.
Worked example
An investment grows from $10,000 to $16,000 over 4 years. CAGR = (16,000 ÷ 10,000)^(1÷4) − 1 = 1.6^0.25 − 1 ≈ 0.125, or about 12.5% a year — even though total growth was 60%.
How CAGR is calculated
The formula is CAGR = (ending ÷ beginning)^(1 ÷ years) − 1. Because it compounds, CAGR is almost always lower than the simple average of yearly returns — and more honest, since it reflects the actual start-to-finish result.
Use it to compare investments, revenue growth, user numbers, or any metric that grows over multiple years.
Frequently asked questions
▶What's the difference between CAGR and average return?
A simple average adds up yearly returns and divides. CAGR compounds them, accounting for the fact that gains build on gains, so it better reflects real, start-to-finish performance.
▶Can CAGR be negative?
Yes. If the ending value is lower than the starting value, CAGR is negative, showing an average annual decline over the period.
▶How do I calculate CAGR?
Divide the ending value by the beginning value, raise the result to the power of 1 divided by the number of years, then subtract 1. Multiply by 100 for a percentage.
▶Is a higher CAGR always better?
Generally a higher CAGR means faster growth, but it says nothing about risk or how bumpy the ride was. A volatile investment and a steady one can share the same CAGR.
▶What's the difference between CAGR and IRR?
CAGR assumes a single start and end value with no cash flows in between. IRR (internal rate of return) handles deposits and withdrawals along the way, so it's used when money moves in and out.
▶Can I use CAGR for revenue or users, not just investments?
Yes. CAGR works for any figure that grows over multiple years — revenue, subscribers, website traffic — giving a single smooth annual growth rate for easy comparison.
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Open calculator →Disclaimer: CAGR Calculator results are estimates for general information and education only, and are not financial, tax, legal or medical advice. Verify important decisions with a qualified professional.