CAGR Calculator
By Santaji GadepatilinUpdated October 27, 2026
CAGR is the steady yearly growth rate that would take an investment from its starting value to its final value. It is the standard way to compare returns over different periods.
Ending value vs Period (years) — other inputs held at your current values.
How to use the CAGR calculator
Enter a starting value, ending value and the number of years to get the CAGR. You can also enter a growth rate to project a future value, or find how many years a target will take.
The currency symbol follows your region; CAGR works the same for revenue, users, population or any other quantity.
CAGR formula
CAGR = (ending ÷ starting)1/t − 1
Worked example
An investment grew from 10,000 to 18,000 over 5 years.
CAGR = (18,000 ÷ 10,000)1/5 − 1 = 1.80.2 − 1 = 12.47% per year
The total growth was 80%, but the yearly compound rate is 12.47% — not 80 ÷ 5 = 16%.
Why CAGR beats simple averages
Suppose an investment rises 50% one year and falls 50% the next. The simple average return is 0%, yet 100 → 150 → 75 is a real loss. CAGR correctly shows −13.4% per year.
CAGR examples
| Start → End | Period | CAGR |
|---|---|---|
| 10,000 → 20,000 | 5 years | 14.87% |
| 10,000 → 20,000 | 10 years | 7.18% |
| 50,000 → 150,000 | 8 years | 14.72% |
| 100 → 80 | 3 years | -7.17% |
| 1,000 → 5,000 | 15 years | 11.33% |
A negative CAGR means the value shrank on average each year.
Where CAGR is used
- Investments: comparing mutual funds, stocks or property bought at different times.
- Business growth: revenue, users or profit growth over several years in annual reports.
- Economics: GDP and population growth rates.
- Planning: projecting a value forward at a steady growth rate — press × on Ending value and enter a CAGR.
CAGR vs absolute return vs XIRR
| Measure | What it tells you | Best for |
|---|---|---|
| Absolute return | Total % gain, ignoring time | Holdings under a year |
| CAGR | Steady yearly rate from start to end | One lump sum, held for years |
| XIRR | Yearly rate with many cash flows | SIPs, top-ups, withdrawals |
If you invested through a SIP, CAGR on the total invested understates or overstates the true return. Use XIRR instead.
Common mistakes
- Using months as years. Enter 18 months as 1.5 years, or switch the unit to months.
- Dividing the total return by years. A 100% gain over 10 years is a 7.18% CAGR, not 10% a year.
- Ignoring dividends. For stocks, include reinvested dividends in the ending value to get total-return CAGR.
Limits of CAGR
- It hides volatility: two investments with the same CAGR can have very different ups and downs.
- It ignores money added or withdrawn during the period.
- Past growth rates do not guarantee future results.
Frequently asked questions
What is CAGR?
CAGR is the steady yearly growth rate that would take a value from its starting point to its ending point over a period, as if it grew at the same rate every year.
What is the CAGR formula?
CAGR = (ending ÷ starting)^(1 ÷ years) − 1. From 10,000 to 18,000 in 5 years gives 12.47%.
Is CAGR the same as average annual return?
No. A simple average of yearly returns overstates growth when returns vary. CAGR reflects what actually happened to the money.
What is a good CAGR?
It depends on the asset. Over long periods, 6–8% is typical for bonds and deposits, and 10–12% for diversified equity funds. Compare against a relevant benchmark rather than a fixed number.
Can CAGR be negative?
Yes. If the ending value is below the starting value the CAGR is negative, showing the average yearly decline.