CAGR Calculator
Compound annual growth rate (CAGR) is the steady yearly rate that would take an investment from its starting value to its ending value over a given period.
Enter your figures below. Results update as you type.
CAGR12.47%
- Total growth
- 80%
- Gain
- $8,000.00
How the CAGR calculation works
CAGR = (ending value / starting value)^(1 / years) - 1
CAGR smooths out the ups and downs along the way, which makes it useful for comparing investments held for different lengths of time.
Frequently asked questions
Is CAGR the same as average annual return?
No. A simple average ignores compounding and overstates growth when returns vary. CAGR is the geometric rate and reflects what the investment actually achieved.
How do I calculate CAGR?
Divide the ending value by the starting value, raise the result to the power of 1 divided by the number of years, and subtract 1. An investment that grows from $10,000 to $16,000 in 5 years has a CAGR of 9.86%.
How do I calculate CAGR in Excel?
Enter =(end/start)^(1/years)-1, for example =(16000/10000)^(1/5)-1, and format the cell as a percentage. The built-in function =RRI(5, 10000, 16000) gives the same answer.
Can CAGR be calculated with a negative starting value?
No. The formula needs a positive starting value, because a growth rate from zero or below has no meaning. In that case, report the change in dollar terms.
Related calculators
Last reviewed: