This CAGR calculator measures the compound annual growth rate of an investment — the single steady yearly rate that would take you from the beginning value to the ending value. Enter any three values (beginning value, ending value, years, or a target CAGR) and it solves for the fourth.
What Is CAGR?
CAGR — compound annual growth rate — answers the question “what steady yearly growth rate explains this result?” Real investments lurch up and down, but CAGR smooths the ride into one comparable number: a stock fund, a business’s revenue and a property’s value can all be compared on CAGR, whatever their paths. It is the standard growth metric in finance, and part of our Finance Calculators collection.
The CAGR Formula
CAGR = (Ending Value ÷ Beginning Value)1/years − 1
Example (verified): $10,000 growing to $16,000 in 5 years → (1.6)1/5 − 1 = 9.86% CAGR. A second example: $5,000 reaching $9,100 in 7 years is a CAGR of 8.93%. At 9.86%, money doubles in about 7.4 years — the calculator shows doubling time automatically, the exact version of the “rule of 72” shortcut.
CAGR vs. Average Return
A simple average of yearly returns overstates growth because it ignores compounding and losses. An investment that gains 50% then loses 50% has an average return of 0% — but $100 became $75, a CAGR of about −13.4% per year. CAGR always reflects the actual money outcome, which is why analysts prefer it. For the return on a single completed investment, our ROI Calculator is the simpler tool; to project an investment forward year by year, use the Investment Calculator.
Using CAGR With Contributions
Plain CAGR assumes one lump sum in and one value out. If you added money along the way — monthly investing, extra deposits — the ending value blends contributions with growth, and CAGR alone will overstate performance. In that case, model the deposits in our Compound Interest Calculator or Investment Calculator instead, and use CAGR for the lump-sum pieces (a single stock position, a property, a business valuation period).
Related Tools
- Investment Calculator — forward projections with contributions
- ROI Calculator — simple return on investment
- Compound Interest Calculator — compounding in detail
Frequently Asked Questions
What is a good CAGR?
Context decides: long-run U.S. stock market CAGR has been around 7–10% after inflation adjustments vary; a savings account might be 0.5–4.5%; a young business might target 15–25%+. Compare like with like, over the same period.
Can CAGR be negative?
Yes — if the ending value is below the beginning value, CAGR is negative and shows the steady yearly rate of decline.
How do I calculate CAGR in Excel?
Use =(Ending/Beginning)^(1/years)-1, e.g. =(16000/10000)^(1/5)-1 → 9.86%. Format the cell as a percentage.
Does CAGR account for money added or withdrawn?
No. It measures a single amount over a period. Regular contributions need an internal-rate-of-return style calculation or a contributions-aware projection.
What is the difference between CAGR and annualized return?
They are usually the same thing: annualized return is the geometric (compounding) average — exactly what CAGR computes.
Is this CAGR calculator free?
Yes — free, instant, no sign-up.