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CAGR Calculator

Calculate CAGR and explore equivalent compound growth scenarios.

CAGR Calculator tool

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About This Tool

Calculate the compound annual growth rate that connects a positive beginning value to a positive ending value over a chosen number of years. CAGR converts the entire endpoint change into one mathematically equivalent constant annual compound rate, making differently sized time spans easier to describe on a common annual basis. The tool also projects an ending value from an assumed rate and solves duration when the rate and direction are compatible. It is arithmetic scenario support, not a forecast or recommendation.

How To Use It

  1. Enter positive beginning and ending values measured on a consistent basis.
  2. Enter the elapsed duration in years. Decimal years are allowed when a period is not an exact whole year.
  3. Read CAGR as the constant annual compound rate that would reproduce the same endpoint change if that rate occurred every year.
  4. Optionally enter an assumed CAGR to project an ending value over the entered duration and estimate how long it would take to move from the beginning value to the ending value at that rate.
  5. Do not interpret CAGR as evidence that each historical year actually earned that rate; review volatility, cash flows, risk, fees, inflation, and other context separately when they matter.

Examples

10% CAGR over five years

A value that grows from 1,000 to 1,610.51 in five years has a CAGR of 10%, because 1,000 × 1.10⁵ = 1,610.51.

Negative CAGR

A value that declines from 1,000 to 810 over two years has a CAGR of −10%, because 1,000 × 0.90² = 810.

CAGR versus total return

Growing from 1,000 to 1,610.51 is a total return of 61.051%. Over five years, the equivalent annual compound rate is 10%. Total return and CAGR describe different time scales.

Project with an assumed rate

Starting at 2,000 and compounding at an assumed 8% for three years gives 2,000 × 1.08³ ≈ 2,519.42. This is a mathematical projection under the entered constant-rate assumption, not a prediction.

Useful Notes

CAGR formula

CAGR (%) = [(ending value ÷ beginning value)^(1 ÷ years) − 1] × 100. Beginning value, ending value, and duration must be positive for this calculator's real-valued endpoint method. A negative CAGR is valid when a positive ending value is below the positive beginning value.

CAGR smooths the path

CAGR uses only the beginning value, ending value, and elapsed time. A volatile series and a smooth series can have the same CAGR when their endpoints match. The number therefore summarizes endpoint growth but does not describe year-to-year returns, drawdowns, variability, or risk.

CAGR versus total return

Total return = (ending ÷ beginning − 1) × 100 and describes the entire period. CAGR annualizes that endpoint change using compound mathematics. A longer period can have a large total return while still having a moderate annual CAGR.

Projection and duration calculations

Projected ending value = beginning × (1 + CAGR)^years. Duration = ln(ending ÷ beginning) ÷ ln(1 + CAGR). The duration solve requires the entered rate to move in the same direction as the requested value change; a positive rate cannot reach a lower positive ending value without additional assumptions.

Important financial and business limitations

CAGR is widely useful for describing compound change in values such as revenue, users, prices, or investment endpoints, but context determines whether it is meaningful. It does not automatically include deposits, withdrawals, dividends, fees, taxes, inflation, risk, or intermediate cash flows. For investments with dated cash flows, a cash-flow-aware measure may be more appropriate.

FAQ

What does CAGR mean?

CAGR means compound annual growth rate. It is the constant annual compound rate that would transform the entered beginning value into the entered ending value over the entered duration.

Can CAGR be negative?

Yes. When both values are positive and the ending value is lower than the beginning value, CAGR is negative. For example, 1,000 falling to 810 over two years corresponds to −10% per year on an equivalent compound basis.

Is CAGR the same as average annual return?

Not necessarily. CAGR is a geometric endpoint rate and ignores the sequence of intermediate annual changes. An arithmetic average of yearly percentage changes is calculated differently and can differ substantially when returns fluctuate.

Does CAGR include cash flows or dividends?

Only if the beginning and ending values you enter already represent the treatment you intend. The calculator itself does not model deposits, withdrawals, dividends, fees, or other intermediate cash flows.

Can I use the projected value as a forecast?

The projection only applies the constant rate you enter for the selected duration. It does not estimate whether that rate is realistic or account for uncertainty, market conditions, risk, or changing business performance, so it should not be treated as a guaranteed forecast or individualized financial advice.