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CAGR Calculator (Compound Annual Growth Rate)

Calculate the compound annual growth rate that takes a starting value to an ending value over a number of years.

Compound annual growth rate
14.87%

Implied growth trajectory

Starting valueGrowth
012345

Value at year 5: $2,000.00

How it works

The compound annual growth rate is the single constant yearly rate that, compounded each year, would turn the starting value into the ending value over the given period: CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1, shown as a percentage.

It smooths out the actual year-to-year ups and downs into one equivalent steady rate, which is why it's useful for comparing investments held over different time spans. All three inputs must be greater than zero.

The chart below applies that same constant rate year by year, starting from your starting value — it's the smooth trajectory CAGR implies, not the actual (probably bumpier) path the real investment took, and it lands exactly on your ending value by the final year.

FAQ

How is CAGR different from a simple average annual return?

A simple average just adds up each year's return and divides by the number of years, ignoring compounding. CAGR accounts for compounding — each year's growth builds on the previous year's balance — so it reflects the true annualized rate and is generally lower than a naive average when returns are volatile.

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