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Calculate the Compound Annual Growth Rate (CAGR) of your investments. Enter the initial value, final value, and number of years to get an accurate annualized return assessment.
Overview
Understand what the tool solves, how it works, and the boundaries of its data.
Compound annual growth rate (CAGR) is the single constant yearly rate that would connect a starting value to an ending value over a stated number of years, assuming compounding. It summarizes the endpoints as an annualized rate; it does not describe what happened in each individual year.
CAGR = ((ending value ÷ starting value)1 ÷ years − 1) × 100%
The calculation uses the same units for the starting and ending values. A positive result means the ending value is higher; a negative result means it is lower.
For a start of 1,000, an end of 2,000, and 5 years, CAGR is about 14.87%. Compounding 1,000 at that rate for five years reaches 2,000, subject to rounding. Investor.gov describes CAGR as a compound annual growth measure, and Microsoft’s RRI function documentation describes finding an equivalent rate from present value, future value, and periods.
The main result is CAGR, shown as a percentage to two decimal places. Total growth is ((end − start) ÷ start) × 100%, the cumulative percentage change across the full interval. Value difference is end − start, expressed in the same units as the inputs and displayed to two decimals.
The chart turns the calculated CAGR into a smooth year-by-year path from the starting value. It is an illustration of a constant-rate equivalent, not a record of actual annual values or a forecast. Intermediate years can rise and fall differently while ending at the same value.
Guide
Follow the workflow and verify inputs and outputs with practical examples.
Enter the same kind of quantity at both endpoints, such as revenue to revenue or account value to account value. Keep the units and definition consistent.
Use the elapsed duration rather than counting calendar-year labels. A period of 30 months can be entered as 2.5 years; the formula accepts a decimal duration.
The figures update when an input changes. Compare CAGR with total growth and the absolute difference so the annualized rate is not mistaken for the full-period change.
Use the curve to visualize a constant compound path. For a fractional number of years, the chart plots whole-number year points only, so use the displayed CAGR as the calculation result.
Enter 1,000 as the starting value, 2,000 as the ending value, and 5 as the years. The ratio is 2; its fifth root is about 1.1487. Subtract 1 and multiply by 100 to get about 14.87% CAGR. Total growth is 100.00% and value difference is 1,000.00.
For a decline, enter 1,000, 800, and 4. The total change is −20%, while the equivalent annual compound rate is about −5.43%. The annualized figure is not simply −20% divided by four.
Use cases
See how the tool fits into real work and everyday tasks.
Compare the start and end of a revenue, customer, or output series over a defined span. Make sure the metric has not changed definition midway through the period.
Present a long-period endpoint change as an equivalent annual rate, alongside the dates and total change so readers can see the full context.
Describe the change between two investment values when the period and valuation basis are known. If money was added or withdrawn along the way, examine a method that uses those dated cash flows.
Q&A
Find concise answers to common questions and confusing cases.
No. CAGR is the constant compounded rate that links the endpoints. An arithmetic average of yearly percentages answers a different question and may not reproduce the ending value.
No. The inputs contain only a starting value, ending value, and duration. Dated deposits and withdrawals are not modeled.
Yes. The years field accepts decimal values such as 2.5. The result uses that duration; the chart displays whole-year positions only.
A zero starting value or zero duration leaves the result blank. For a meaningful CAGR, use a positive starting value, positive ending value, and positive duration.
Notes
Review scope, result limitations, and important precautions before use.
CAGR is a mathematical summary of entered endpoints. It is not a return promise, valuation, forecast, or personalized investment recommendation.
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