CAGR Calculator

Compound annual growth rate: the smoothed yearly pace between a start and end value.

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Formula

CAGR = (end ÷ start)^(1 ÷ years) − 1

Example

Growing $10,000 to $25,000 in 5 years = (2.5)^(0.2) − 1 ≈ 20.1% per year.

When CAGR is the right lens

Revenue, subscribers, portfolio value — anything compounding smoothly benefits from CAGR summarization. It deliberately smooths volatility: a fund bouncing −10%, +40%, +5% has a CAGR near its geometric mean, not its arithmetic one.

Frequently asked questions

CAGR vs average annual return?

CAGR is geometric and reflects true compounding; the arithmetic average overstates performance when returns vary year to year.