CAGR Calculator
Calculate Compound Annual Growth Rate (CAGR) for investments, revenue, or any metric over time.
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How to use this calculator
Raise the ratio of end to start value to the power of 1 divided by number of years, then subtract 1.
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Enter the starting value (initial investment or metric).
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Enter the ending value after the period.
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Enter the number of years.
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The calculator returns the CAGR — the steady annualised growth rate that would produce the same result.
Frequently asked questions
What does CAGR mean?
CAGR (Compound Annual Growth Rate) is the rate at which an investment would have grown each year if it grew at a perfectly steady pace. It smooths out year-to-year volatility to give a single representative annual rate.
What is a good CAGR for an investment?
For stock market investments, 7–10% CAGR is considered strong (matching the long-term S&P 500). For growth stocks or businesses, 15–25% CAGR is excellent. For savings accounts, 3–5% is typical.
What is the difference between CAGR and average annual return?
CAGR uses geometric growth and accurately reflects actual compounding. Simple average return (arithmetic mean) overstates returns when there is volatility. Example: +50% then -50% = average 0%, but CAGR is -13.4% (you actually lost money).
Can CAGR be used for non-financial metrics?
Yes. CAGR works for any metric over time — revenue growth, user base, population, website traffic. It is widely used in business analysis and reporting.
CAGR: Compound Annual Growth Rate explained
Why CAGR is the standard growth metric
CAGR is the go-to metric in finance and business because it accounts for compounding and gives a single clean number regardless of how bumpy the growth was year to year. A company that grew revenue from $1M to $2.59M over 5 years has a CAGR of 21%, even if individual years varied wildly.
CAGR vs IRR
CAGR works when you have a single start value, single end value, and a fixed time period. IRR (Internal Rate of Return) is used when there are multiple cash flows at different times (e.g. annual dividends or contributions). For simple investment growth with no interim cash flows, CAGR and IRR give the same result.
Real-world CAGR benchmarks
S&P 500 (1926–2023): ~10% CAGR. Warren Buffett / Berkshire Hathaway: ~20% CAGR over 50 years. Typical tech startup target: 20–30% CAGR. Savings account: 2–5%. Inflation (US): ~3% long-term CAGR.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →