# 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.

- Interactive calculator: https://calculatorswithsteps.com/cagr-calculator
- Category: Financial Calculators
- Last updated: 2026-11-10
- Publisher: Calculators With Steps (calculatorswithsteps.com)

## How to use the CAGR calculator

1. **Choose a mode.** "CAGR" finds the growth rate. "Ending value" projects what a starting amount grows to at a given rate.
2. **Beginning value.** The value at the start: an investment, revenue, users, population or any positive amount.
3. **Ending value or CAGR.** The value at the end of the period, or the yearly rate if you are projecting.
4. **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.**

1. Growth multiple = 19,500 ÷ 10,000 = 1.95
2. 1 ÷ 5 = 0.2
3. 1.95^0.2 = 1.142897
4. 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](https://calculatorswithsteps.com/sip-calculator) projects monthly investing, and the [lumpsum calculator](https://calculatorswithsteps.com/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](https://calculatorswithsteps.com/inflation-calculator) shows how much prices have risen.
- **Compounding inside a year.** For a savings rate that compounds monthly, use the [compound interest calculator](https://calculatorswithsteps.com/compound-interest-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.

## Sources

- [Wikipedia – Compound annual growth rate](https://en.wikipedia.org/wiki/Compound_annual_growth_rate)
- [Microsoft Support – RRI function (Excel)](https://support.microsoft.com/en-us/office/rri-function-6f5822d8-7ef1-4233-944c-79e8172930f4)

> Disclaimer: results are estimates for information and education, not financial advice. Confirm important decisions with a qualified professional.