CAGR Calculator
A value that grows from 10,000 to 16,105.10 over 5 years has an estimated CAGR of 10 percent. This CAGR calculator estimates the compound annual growth rate between a starting value and an ending value over a set number of years. It also shows total growth across the full period, which helps you separate the annualized pace from the full change in value.
Quick answer
CAGR smooths uneven year-to-year performance into one annualized rate.
What this tells you
- •CAGR smooths uneven year-to-year performance into one annualized rate.
- •Use it to compare investments, revenue growth, or other values measured across multiple years.
- •A negative CAGR means the ending value is lower than the starting value, even if some years were positive along the way.
How to Use
- 1Enter the starting value at the beginning of the period.
- 2Enter the ending value at the end of the period.
- 3Enter the number of years between those two values. Decimal years are supported when needed.
- 4Calculate to see the annualized CAGR and the total growth percentage for the full period.
How It Works
Formula
CAGR = ((Ending value ÷ Starting value)^(1 ÷ Years) - 1) × 100
Total growth = ((Ending value ÷ Starting value) - 1) × 100CAGR converts the full change into a single annualized growth rate. That makes it useful for comparing periods that had uneven results, as long as you remember it is a smoothed summary rather than a year-by-year record.
Calculation note: values are processed in the order shown above, using the current input units.
Worked Examples
Investment growth over 5 years
This investment averaged 10% annualized growth across the 5-year period, even if the actual yearly returns moved up and down.
Revenue growth over 4 years
Revenue ended 64% higher than it started, which works out to about 13.16% annualized growth when smoothed across 4 years.
What CAGR tells you
Use CAGR and total growth together so you do not lose context.
| Metric | What it shows | What it can hide |
|---|---|---|
| CAGR | The smoothed annualized rate across the full period | Volatility and the path between the start and end values |
| Total growth | The full percentage change from start to finish | How fast or slow the growth happened each year |
If you need year-by-year detail, review the actual annual returns alongside CAGR.
Common mistakes
- Treating CAGR as the actual return earned every year
- Comparing results from periods with different risk, fees, or cash flows without extra context
- Using zero or negative starting values, which do not work with the CAGR formula
Limitations
CAGR uses only the starting value, ending value, and time period. It does not show volatility, interim drawdowns, contributions, withdrawals, fees, taxes, or inflation. If money moved in or out during the period, you may need a different return measure such as IRR or time-weighted return.