CAGR smooths out the ups and downs of an investment or business metric into one steady yearly rate. It is ideal for comparing growth over time, but hides volatility, as two investments with the same CAGR can have very different risks.
How to use the CAGR Calculator
- Initial value
- Number of periods
- Final value
- Every result field is editable: type into Compound annual growth rate (CAGR) and Final value plus every other field update to match.
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the initial value, final value and the number of periods (usually years). Type into the CAGR to find the final value.
Inputs explained
| Field | What to enter |
|---|---|
| Initial value | Amount in your currency |
| Number of periods | A number |
| Final value | Amount in your currency |
What each result means
- Compound annual growth rate (CAGR) = (([Final value]÷[Initial value])^(1÷[Number of periods]) – 1)×100
- Change in value = [Final value] – [Initial value]
- Total growth = ([Final value]÷[Initial value] – 1)×100
- Years to double at this rate = ln(2)÷ln(1 + [Compound annual growth rate (CAGR)]÷100)
Example values
How the main result changes when Final value changes and everything else stays at the example values above:
| Final value | Compound annual growth rate (CAGR) (%) |
|---|---|
| 9,000 | -2.09 |
| 13,500 | 6.19 |
| 18,000 | 12.47 |
| 22,500 | 17.61 |
| 27,000 | 21.98 |
| 36,000 | 29.2 |
Formula
CAGR = (final value ÷ initial value)¹ ÷ periods) − 1
Final value = initial value × (1 + CAGR)^periods
Worked example
Inputs: Initial value: $10,000; Number of periods: 5; Final value: $18,000.
Results: Compound annual growth rate (CAGR) = 12.47 %; Change in value = $8,000.00; Total growth = 80 %; Years to double at this rate = 5.9.
Frequently asked questions
What is a good CAGR?
For stocks, 7–10% a year has been typical over the long run.
How is CAGR different from average return?
CAGR is the geometric average, so it accounts for compounding.
Can CAGR be used for revenue?
Yes, it's widely used for revenue, users and other business metrics.
Sources
Guides on this topic
- How to Calculate ROI: Formula, Annualized ROI and Real Examples: The ROI formula in one line, how to annualize it so different holding periods compare fairly, and worked marketing and rental property examples.
- How Does Compound Interest Work? Formula, Examples and the Rule of 72: Compound interest explained with real numbers: the formula, why compounding frequency matters, the rule of 72, monthly contributions over 30 years and how the same math works against you on debt.