CAGR calculator

Compound annual growth rate in one step

The compound annual growth rate, or CAGR, is the single yearly rate that would take a starting value to a final value if growth had been perfectly steady. People also call it the average annual growth rate. This CAGR calculator works it out from two values and a period, in years or between two dates, and it also runs the other way: final value, starting value or time needed from a given rate.

How to use it

1. Under "What do you want to find?", pick the CAGR, the final value, the starting value or the time needed.
2. Fill in "Starting value", "Final value" or "Annual growth rate (%)" as required.
3. For the "Period", choose "In years" (for example 3 or 2.5) or "Between two dates". With dates, the tool counts whole months, then the remaining days as a share of the month: 1 January 2020 to 1 July 2025 is exactly 5.5 years.
4. To compare with the average of yearly rates, paste your yearly figures into "Yearly values", one per line.

The CAGR formula with a worked example

CAGR = (final value ÷ starting value)^(1 ÷ n) − 1, where n is the number of years. A small business grows its turnover from £180,000 to £240,000 over 6 years: 240,000 ÷ 180,000 = 1.3333, and 1.3333^(1/6) = 1.0491. The CAGR is 4.91% a year.

The reverse calculations use the same formula. $1,000 that grows to $1,500 in 3 years has a CAGR of 14.47%. 100 growing at 7% for 10 years becomes 100 × 1.07^10 = 196.72. The time to reach a target is ln(final ÷ start) ÷ ln(1 + rate): doubling at 6% takes ln 2 ÷ ln 1.06 = 11.90 years. The rule of 72 gives 72 ÷ 6 = 12 years. The tool shows both figures and the gap between them.

Why the average of yearly returns misleads

You put $5,000 into shares. Year one they rise 50% to $7,500, year two they fall 36% to $4,800. The arithmetic average of the two returns is +7%, yet you have lost $200. The CAGR is −2.02% a year: $5,000 × 0.9798² ≈ $4,800.

With the series loaded in the tool, 100, 150, 120, 180, the rates are +50%, −20% and +50%: an average of 26.67% against a CAGR of 21.64%. At 26.67% a year you would reach 203.23, not 180. A fall weighs more than a rise of the same size because it hits a bigger base, so the average beats the CAGR whenever the rates differ.

Where CAGR is used

• Revenue: compare two companies over periods of different lengths.
• Population: a town that went from 50,000 to 56,000 residents over 8 years grew by 1.43% a year.
• Investments: turn the result of an ISA, a fund or a property into a yearly rate you can compare.
• Prices: an average house price that rose from £280,000 to £340,000 in 8 years went up by 2.46% a year.

What CAGR does not tell you

CAGR looks only at the first and last values. It smooths everything in between: a 30% crash followed by a recovery disappears if the end points are the same. That is why the chart sets the constant-rate path, drawn as a dashed line, against your real values. CAGR describes the past; it does not forecast the years ahead. It is not defined when a value is zero or negative,: the tool says so.

Frequently asked questions

What is the difference between CAGR and total growth?

Total growth is the overall change: from £180,000 to £240,000 it is +33.33%. CAGR spreads it into a compounded yearly rate: 4.91% over 6 years, not 33.33 ÷ 6 = 5.56%.

Can the period be a fraction of a year?

Yes. Type a decimal such as 5.5, or choose "Between two dates". From 100 to 200 in 5.5 years, the CAGR is 13.43%.

Why does the tool reject a negative value?

The ratio of final to starting value must be positive to take its root. When a result swings from a loss to a profit, compare the change in pounds or dollars instead.

Are my entries kept?

Yes, on this device. "Copy link" also shares the calculation, and "Reset" brings back the sample values.