CAGR Calculator
Calculate compound annual growth rate from a starting value, ending value, and time period in years.
Guide
What is CAGR?
Compound annual growth rate (CAGR) is the constant yearly rate that would grow a starting value into an ending value across a given number of years, assuming growth compounds once per year. CAGR smooths an entire period into one annualized figure and does not describe year-by-year volatility.
Formula
CAGR (%) = ((Ending value ÷ Starting value) ^ (1 ÷ Years) − 1) × 100. The starting value must be greater than zero, the ending value must be zero or greater, and the period in years must be greater than zero. Fractional years are allowed.
Worked example
Suppose an investment grows from 10,000 to 19,600 over 5 years. The ratio is 19,600 ÷ 10,000 = 1.96. Raising 1.96 to the power of 1 ÷ 5 gives about 1.1441. Subtracting 1 and multiplying by 100 gives a CAGR of about 14.41%.
Assumptions and limitations
This Calculator assumes a single starting value, a single ending value, and a continuous period measured in years. It does not model intermediate cash flows, deposits, withdrawals, fees, taxes, or changing growth rates within the period. A zero ending value is treated as a complete loss and returns −100% CAGR.
Common questions
Why must the starting value be positive? CAGR uses division by the starting value, so zero or negative starting values would not produce a meaningful annualized growth rate in this model. Can I use fractional years? Yes. A period such as 2.5 years is valid. Does CAGR show volatility? No. Two investments with the same starting value, ending value, and period can have very different year-by-year paths but identical CAGR.
Methodology
The Calculator uses exact decimal arithmetic for validation and calculation, then rounds values only for display. Total percentage change is shown as supporting context and uses (ending value − starting value) ÷ starting value × 100.