CAGR Calculator

Find the compound annual growth rate (CAGR) that turns a starting value into an ending value.

Starting value	$10,000
Ending value	$25,000
Years	7 years

Starting value

Ending value

Years

years

CAGR

13.99%

Growing 13.99% every year for 7 years turns 10,000 into 25,000.

Growing 13.99% a year

Year 7Value $25,000Point at the chart, or Tab to it and use ← →

How this was worked out

1
Ratio
25,000 ÷ 10,000 = 2.5
2
Take the 7th root and subtract 1
2.5^(1/7) − 1 = 0.139852

About the CAGR Calculator

CAGR answers one question: what steady yearly growth rate would take you from the starting value to the ending value in the same time? Enter the two values and the number of years; the chart shows the smooth path and the steps show the working.

It is the standard way to compare investments, a company's revenue or sales growth, or the growth of a city's population over periods of different lengths. Real growth is rarely smooth, so CAGR says nothing about how bumpy the ride was.

The formula

$\text{CAGR} = \left(\frac{V_{\text{end}}}{V_{\text{start}}}\right)^{1/n} - 1$

V_end: value at the end of the period
V_start: value at the start
n: number of years (fractions allowed, e.g. 2.5)

How to read your result

A CAGR of 14% means the value would have grown 14% every single year to end where it did. At that rate money doubles in about 5 years (the rule of 72: 72 ÷ 14 ≈ 5.1).
Compare CAGR with inflation to see real growth: 14% CAGR with 5% inflation is roughly 8.6% real growth a year.

Worked example

An investment that grew from 10,000 to 25,000 in 7 years

Ratio: 25,000 ÷ 10,000 = 2.5
7th root: 2.5^(1/7) = 1.13985
CAGR = 1.13985 − 1 = 13.99% a year

Things to keep in mind

Uses only the first and last values: money added or withdrawn in between distorts it. For regular investments such as a SIP, use the XIRR Calculator.
Ignores volatility: two investments with the same CAGR can have had very different falls along the way.
Taxes, fees and dividends paid out are not included unless they are already in the ending value.

Questions people ask

CAGR or average return?

CAGR is the true compound rate. The simple average of yearly returns overstates it when returns vary: +50% then −50% averages 0%, but you actually lost 25%, a CAGR of −13.4%.

Can CAGR include SIPs?

No. With money going in at different times, use XIRR, which weights each payment by how long it was invested.

What is a good CAGR?

It depends on the risk taken. Over long periods broad stock market indices have compounded at very roughly 6–12% a year in nominal terms, depending on the market and period; fixed deposits and bonds lower.

Can CAGR be negative?

Yes: if the ending value is below the starting value, CAGR is the steady yearly rate of decline.