CAGR Calculator – Compound Annual Growth Rate Formula

CAGR Calculator

CAGR = (ending value ÷ beginning value)^(1 ÷ years) − 1. An investment that grows from $10,000 to $19,500 in 5 years has a CAGR of 14.29%, the steady yearly rate that links the two values. Enter a start value, end value and period, or switch modes to project an ending value.

By the Calculators With Steps team · Updated November 10, 2026 · How we check our math

Year

Value

$10,000.00

$11,428.97

$13,062.13

$14,928.66

$17,061.91

$19,500.00

How to use the CAGR calculator

Choose a mode. “CAGR” finds the growth rate. “Ending value” projects what a starting amount grows to at a given rate.
Beginning value. The value at the start: an investment, revenue, users, population or any positive amount.
Ending value or CAGR. The value at the end of the period, or the yearly rate if you are projecting.
Years and months. The length of the period. Add months for periods like 2 years 9 months.

The result shows the rate, the absolute return, the growth multiple, the doubling time and a year-by-year path at a steady rate. You can switch the currency, for example to rupees.

CAGR formula

CAGR = (EV ÷ BV)^(1 ÷ n) − 1

EV = BV × (1 + CAGR)^n

EV = ending value
BV = beginning value
n = number of years (months ÷ 12 for part years)

The first formula finds the rate. The second runs it in reverse to project an ending value.

Worked examples

Example 1: $10,000 to $19,500 in 5 years.

Growth multiple = 19,500 ÷ 10,000 = 1.95
1 ÷ 5 = 0.2
1.95^0.2 = 1.142897
CAGR = 1.142897 − 1 = 14.29%

Year	Value at 14.29% a year
0	$10,000.00
1	$11,428.97
2	$13,062.13
3	$14,928.66
4	$17,061.91
5	$19,500.00

The absolute return is 95%. Dividing that by 5 gives 19% a year, which overstates the growth because it ignores compounding.

Example 2, in rupees: ₹1,00,000 to ₹2,50,000 in 5 years. The multiple is 2.5, and 2.5^0.2 − 1 = 20.11% a year. The absolute return is 150%.

Example 3, reverse: ₹5,00,000 at 12% CAGR for 10 years. EV = 5,00,000 × 1.12^10 = ₹15,52,924, about ₹15.53 lakh, or 3.106 times the money.

CAGR for mutual funds and stocks

For a fund or share, use the NAV or price on the two dates and the exact time between them. If a fund’s NAV rose from ₹25 to ₹40 over 4 years, its CAGR is 1.6^0.25 − 1 = 12.47% a year. Add dividends paid out along the way for a full total return, or compare growth-option NAVs, which already reinvest them. For periods given in months, divide the months by 12: 30 months is 2.5 years.

Why CAGR differs from the average return

CAGR is a geometric average; adding up yearly returns and dividing gives an arithmetic average, which ignores compounding. Volatility makes the gap bigger. An investment that gains 50% one year and loses 50% the next has an average return of 0%, yet $100 becomes $150 and then $75. Its CAGR is −13.40% a year, which matches what really happened to your money.

That is also why CAGR is the fair way to compare a mutual fund, a stock, a company’s revenue or a country’s GDP over different periods. Fund factsheets in India quote 3-year and 5-year returns as CAGR for this reason.

When CAGR is the wrong tool

Regular deposits. CAGR assumes one starting amount. For monthly investing, returns are measured with XIRR. Our SIP calculator projects monthly investing, and the lumpsum calculator handles a single investment.
Volatility. Two investments with the same CAGR can have very different paths. CAGR says nothing about how far the value fell along the way.
Short periods. Annualizing a 3-month gain can produce a large, misleading number. Quote CAGR for periods of a year or more.
Negative or zero start. The formula needs a positive beginning value. For a company moving from a loss to a profit, report the change in dollars instead.

Quick checks

Rule of 72. Divide 72 by the CAGR to estimate the doubling time. At 12%, money doubles in about 6 years; the exact figure is 6.1 years.
Real growth. Subtract inflation to see growth in purchasing power. The inflation calculator shows how much prices have risen.
Compounding inside a year. For a savings rate that compounds monthly, use the compound interest calculator.

CAGR Calculator: frequently asked questions

What is CAGR?

CAGR, the compound annual growth rate, is the constant yearly rate at which a value would have to grow, with gains reinvested, to get from its starting value to its ending value over a period. It smooths out the ups and downs of the actual years.

How do I calculate CAGR?

Divide the ending value by the beginning value, raise the result to the power of 1 ÷ number of years, and subtract 1. For $10,000 growing to $19,500 in 5 years: 1.95^0.2 − 1 = 0.1429, or 14.29% a year.

How do I calculate CAGR in Excel?

With the start value in A2, end value in B2 and years in C2, use =(B2/A2)^(1/C2)-1 and format the cell as a percentage. Excel's built-in =RRI(C2,A2,B2) gives the same answer.

How do I calculate CAGR for 3 years?

Use 3 as the number of years in the formula. If revenue grew from $2 million to $3 million over three years, CAGR = 1.5^(1/3) − 1 = 14.47% a year. For a period like 3 years and 6 months, use 3.5 years.

What is the difference between CAGR and absolute return?

Absolute return is the total change over the whole period; CAGR is the yearly compound rate. ₹1,00,000 growing to ₹2,50,000 in 5 years is a 150% absolute return but a 20.11% CAGR, not 30% a year.

Can CAGR be negative?

Yes. If the ending value is lower than the starting value, CAGR is negative. $10,000 falling to $8,000 over 3 years is a CAGR of −7.17%. CAGR cannot be calculated when the starting value is zero or negative.

Should I use CAGR or XIRR for a SIP?

Use XIRR. CAGR assumes one amount invested at the start, but a SIP adds money every month, so each instalment is invested for a different length of time. CAGR is right for a lump sum or for comparing a fund's NAV between two dates.