CAGR Calculator
Calculate the compound annual growth rate between a beginning and ending value.
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9.86%
Compound annual growth rate (CAGR)
What this calculator does
Finds the constant compounded annual rate that would transform one positive beginning value into a non-negative ending value over the entered time. It can summarize growth or decline in an investment, revenue, users, prices, or another consistently measured quantity.
How to use it
Enter a beginning value greater than zero, an ending value of zero or more, and the elapsed years. Fractional years are accepted when they represent the actual interval. Keep both values in the same currency, unit, accounting basis, and measurement scope.
Worked example
A value growing from 10,000 to 16,000 over five years has a CAGR of approximately 9.856%. This means 10,000 × (1 + 0.0985605)^5 is about 16,000; automated tests also cover a decline, no change, a total loss, and fractional-year input.
Formula and boundaries
CAGR = (ending value ÷ beginning value)^(1 ÷ years) − 1. The calculator uses a logarithmic equivalent for numerical stability and displays two decimal places. A zero ending value produces −100%; a zero or negative beginning value, negative ending value, or non-positive duration is rejected because the real-valued ratio is undefined for this model.
What CAGR means
CAGR is a geometric annualized rate linking only the two endpoints. It is not the arithmetic average of observed annual returns and it does not claim that the measured value actually changed at that steady rate in any individual year.
Cash flows, volatility and risk
Intermediate deposits, withdrawals, dividends, fees, taxes, inflation, exchange rates and reinvestment are not represented unless already included consistently in the endpoint values. CAGR hides the path, volatility, drawdowns and timing of cash flows, so equal CAGRs can describe very different experiences and risks.
Comparison and regional limits
Compare periods only when definitions, dates, currencies, valuation methods and treatment of distributions are aligned. For investor performance with external cash flows, a money-weighted or time-weighted return may be more appropriate; reporting and tax standards vary by jurisdiction.
Sources, warning and privacy
The definition and compounding interpretation were checked against the U.S. Securities and Exchange Commission's Investor.gov CAGR glossary and compound-growth guidance; reviewed September 2026. This is an educational estimate, not financial, investment, tax, accounting or legal advice, and past growth does not predict future results. Calculation runs locally and Quiklio does not upload the values.
Frequently Asked Questions
- What does CAGR actually represent?
- It's the constant annual growth rate that, if applied every year, would take the beginning value to the ending value over the given number of years — it smooths out year-to-year volatility into a single average rate.
- Why use CAGR instead of a simple average of yearly returns?
- A simple average of yearly percentage returns can be misleading because it ignores the effect of compounding and the order of gains and losses; CAGR is geometric and reflects the actual growth path.
- Can CAGR show a loss or accept zero?
- A lower non-negative ending value produces a negative CAGR, and an ending value of zero produces −100%. The beginning value must be above zero and the elapsed time must be positive.