CAGR Calculator
Compound annual growth rate for any investment or business metric with future projection
Compare any growth on equal terms
CAGR converts any multi-year return into an annual figure. It is how analysts and investors fairly compare investments of different durations.
CAGR calculation
The compound annual growth rate from any start value and end value over any period.
Future projection
Project forward from your ending value using the calculated CAGR to see where growth leads.
Fair comparison
Compare investments of 3, 7, and 15 years on an equal annual basis using CAGR.
Business metrics
Works for revenue growth, user growth, ARR, or any metric with a start and end value.
Total return too
Shows both the CAGR and the total percentage return for a complete picture.
100% private
All calculations run in your browser. Nothing is stored or transmitted.
When to use it
Portfolio review
Calculate the true annualized return on a stock, fund, or full portfolio.
Business planning
Measure revenue CAGR to benchmark against competitors or set growth targets.
Real estate
Find the annualized appreciation rate of a property over your holding period.
Goal reverse-engineering
Know the CAGR you need to hit a target and work backward to find suitable investments.
Frequently Asked Questions
What is CAGR?
CAGR stands for Compound Annual Growth Rate. It is the rate at which an investment would have grown if it grew at a steady rate, compounding annually. CAGR smooths out year-to-year volatility into a single representative annual figure. A $10,000 investment that grew to $25,000 over 10 years has a CAGR of 9.6%, meaning it grew by 9.6% per year on average, compounded.
How is CAGR calculated?
CAGR = (Ending Value / Starting Value) ^ (1 / Number of Years) − 1. For example, a starting value of $10,000, an ending value of $25,000, and 10 years gives: (25,000 / 10,000) ^ (1/10) − 1 = 2.5^0.1 − 1 = 0.096, or 9.6% CAGR.
What is the difference between CAGR and average annual return?
Average annual return is the simple average of yearly returns. CAGR is the geometric mean — it accounts for compounding. CAGR is always lower than or equal to the simple average when returns vary year to year. CAGR is more accurate for measuring investment growth because it reflects what you actually ended up with, not an abstract average.
What CAGR should I expect from stocks?
The US stock market (S&P 500) has historically delivered a CAGR of roughly 10% per year (nominal) or 7% per year after inflation over long periods. Individual stocks, sectors, and smaller markets vary widely. Past CAGR is informative but not predictive — future returns are uncertain. Use historical stock market CAGR (6–7% real) as a conservative benchmark for long-term planning.
Can CAGR be used for business metrics?
Yes — CAGR is widely used in business to measure growth in revenue, users, units sold, or any metric over time. It allows fair comparison of growth rates between companies or periods of different lengths. A company growing revenue from $5M to $20M over 6 years has a revenue CAGR of 26%, which you can compare to industry peers or your own targets.
Understanding CAGR
Compound annual growth rate is the standard way to express multi-year growth as a single, comparable annual number. Its power lies in what it normalizes: a 50% total return over 3 years is very different from a 50% total return over 10 years, and CAGR makes that difference explicit. Without CAGR, comparing investments or business metrics across different time periods is essentially impossible.
Why CAGR differs from average return
If an investment gains 50% one year and loses 33% the next, the simple average return is +8.5%. But your money is back where it started ($100 → $150 → $100). The CAGR is 0%. The average return is misleading because it does not account for compounding — large losses require proportionally larger gains to recover. CAGR always reflects what actually happened to your money over the full period.
CAGR in business analysis
CAGR is one of the most common metrics in business finance. Revenue CAGR over 3 or 5 years is a standard way to describe a company's growth trajectory, compare it to industry peers, and set targets. Investors use CAGR to evaluate whether a company is growing faster or slower than the market or its sector. A high CAGR is not inherently good — a 50% revenue CAGR on a small base means something very different from 50% on $100M in revenue.
Limitations of CAGR
CAGR shows you the start and end points but nothing about the path in between. A volatile investment and a steady one might have identical CAGRs over a period, but the volatile one exposed you to much larger drawdowns along the way. Risk-adjusted measures (like Sharpe ratio) complement CAGR by accounting for how smoothly the growth occurred. For long-term planning, combine CAGR with scenarios — a range of possible growth rates — rather than treating a single historical CAGR as a reliable forecast.