CAGR Calculator
Calculate the compound annual growth rate of an investment, revenue, or any value over time. Enter beginning value, ending value, and time period. All calculations run in your browser.
Year-by-Year Growth
Growth Table
| Year | Value | Growth ($) | Cumulative Growth |
|---|
The CAGR Formula
Standard CAGR
CAGR = (EV / BV)^(1/n) - 1
Where EV = ending value, BV = beginning value, and n = number of years. This gives the single annual rate that, compounded yearly, takes BV to EV.
Future Value from CAGR
FV = BV x (1 + CAGR)^n
If you know the CAGR and beginning value, you can project the future value at any number of years. Use the "Find Future Value" mode above.
CAGR vs Simple Average
If an investment returns +50% then -33%, the simple average is +8.5%. But the actual value is unchanged ($100 -> $150 -> $100). CAGR correctly reports 0%. Always use CAGR for multi-year performance comparison.
When to Use CAGR
- Comparing investment performance across different time periods
- Measuring revenue or profit growth rates
- Projecting future values at a steady growth rate
- Evaluating business metrics like user growth or market expansion
CAGR Benchmarks
| Benchmark | Typical CAGR | Notes |
|---|---|---|
| S&P 500 (historical) | ~10% | Nominal; ~7% inflation-adjusted over 50+ years |
| US GDP | ~2-3% | Real GDP growth rate |
| US Inflation (CPI) | ~2-3% | Long-run average |
| Real Estate (US median home) | ~3-5% | Varies heavily by region |
| High-growth SaaS revenue | 20-50%+ | Early-stage; slows with scale |
| Mature company revenue | 5-15% | Established businesses |
| Gold (historical) | ~5-7% | Long-term average nominal |
| US Treasury bonds | ~2-5% | Varies by term and period |
Worked Examples
Investment Growth
You invested $10,000 five years ago and it is now worth $18,500.
CAGR = (18500/10000)^(1/5) - 1 = 13.1%
Your investment grew at an average of 13.1% per year, compounded annually.
Revenue Growth
Company revenue grew from $2M to $8M over 4 years.
CAGR = (8/2)^(1/4) - 1 = 41.4%
This 41.4% annual growth rate is strong for a scaling business.
Projecting Future Value
If $50,000 grows at 8% CAGR for 20 years:
FV = 50000 x (1.08)^20 = $233,048
The power of compounding: more than 4.5x growth without additional contributions.
Frequently Asked Questions
What is CAGR?
CAGR (Compound Annual Growth Rate) is the mean annual growth rate of an investment or metric over a period longer than one year. It represents the constant rate at which a value would have to grow each year to reach the ending value from the beginning value. CAGR smooths out volatility and gives a clean annual rate for comparison.
How is CAGR calculated?
The formula is: CAGR = (Ending Value / Beginning Value)^(1/Years) - 1. For example, $10,000 growing to $20,000 over 5 years gives CAGR = (2)^(0.2) - 1 = 14.87% per year.
What is a good CAGR?
Context matters. The S&P 500 averages about 10% CAGR historically. For revenue growth, 20-40%+ is strong for startups, while 5-15% is solid for mature companies. Compare CAGR to relevant benchmarks in the same category rather than using a universal threshold.
What is the difference between CAGR and average annual return?
Average annual return is the arithmetic mean of each year's return. CAGR is the geometric mean that accounts for compounding. If returns are volatile, the arithmetic average will overstate actual growth. CAGR reflects the real annualized performance.
Does this calculator store my data?
No. All calculations run entirely in your browser using JavaScript. No data is sent to any server.
Related Tools
- Compound Interest Calculator -- calculate compound growth with regular contributions
- Investment Return Calculator -- project investment growth over time
- ROI Calculator -- calculate return on investment percentage
- Stock Profit Calculator -- calculate profit or loss from stock trades
- Inflation Calculator -- see how inflation erodes purchasing power
Privacy & Limitations
- Client-side only. No data is sent to any server. No cookies, no tracking.
- Assumes constant growth. CAGR represents a smoothed annual rate. Actual year-to-year returns may vary significantly.
- Not financial advice. CAGR is a descriptive measure, not a predictor. Past performance does not guarantee future results.
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CAGR Calculator FAQ
What is CAGR?
CAGR (Compound Annual Growth Rate) is the average annual growth rate of an investment or metric over a specified period longer than one year. Unlike simple average growth, CAGR accounts for compounding and gives a single smooth annual rate that would take you from the beginning value to the ending value.
How is CAGR calculated?
CAGR is calculated using the formula: CAGR = (Ending Value / Beginning Value)^(1/Years) - 1. For example, if an investment grows from $10,000 to $20,000 over 5 years, the CAGR is (20000/10000)^(1/5) - 1 = 14.87%.
What is a good CAGR?
A 'good' CAGR depends entirely on context. For the S&P 500, the historical average is about 10% nominal (7% inflation-adjusted). For startup revenue, 20-40%+ may be expected. For mature companies, 5-15% is solid. Always compare CAGR to relevant benchmarks rather than using absolute thresholds.
What is the difference between CAGR and average annual return?
Average annual return is the simple arithmetic mean of yearly returns. CAGR is the geometric mean that accounts for compounding. CAGR gives the actual annualized rate at which an investment grew, while the arithmetic average can overstate performance when returns vary year to year.
Does this calculator store my data?
No. All calculations run entirely in your browser using JavaScript. No inputs or results are sent to any server.