CAGR calculator
The steady yearly rate that turns a starting value into an ending value.
CAGR
Rounded for displayCAGR: ≈ 10.0103%
- Total growth
- 95%
- Multiple
- 1.95 ×
How it works
CAGR smooths an uneven path into one constant yearly rate. Divide the ending value by the starting value, take the root for the number of years and subtract 1.
It says nothing about the ups and downs along the way, and it ignores money added or taken out in between. Years can be fractional, for example 2.5.
Formula
CAGR = (end ÷ start)^(1 ÷ years) − 1 Total growth = end ÷ start − 1
Worked example
An investment that grew from 10,000 to 19,500 in 7 years has a total growth of 95%, a multiple of 1.95 and a CAGR of 1.95^(1/7) − 1 ≈ 10.01% a year.
Questions people ask
Why is CAGR lower than the average yearly return?
A simple average ignores compounding. +50% then −50% averages 0% but leaves you with 75% of the start, a CAGR of about −13.4%.
Can I use it for revenue or population?
Yes. CAGR works for any quantity that grows over time, as long as both values are positive.