Compound annual growth rate expresses multi-year growth as a single smoothed annual rate. Enter beginning and ending values, or paste an annual series, to compare CAGR with year-over-year changes and project the next period.
How it works
Measure compound annual growth between two values, or paste a series to see year-over-year changes alongside the compound rate.
CAGR = (Ending value ÷ Beginning value)^(1/n) − 1
YoY % = Valueₜ ÷ Valueₜ₋₁ − 1
Years to double = ln 2 ÷ ln(1 + CAGR)Common uses
- Revenue, volume and market growth analysis
- Investment performance reporting
- Validating forecast growth assumptions
Worked example
The calculator above opens with this example. Change any input to see the results update instantly, or select Reset to return to these figures.
| Beginning value | $2,400,000 |
| Ending value | $3,650,000 |
| Number of years | 4 |
| First year (labels) | 2,021 |
| CAGR | 11.05% |
| Total growth | 52.1% |
| Growth multiple | 1.52× |
| Next year at CAGR | $4,053,342 |
| Years to double at CAGR | 6.61 years |
Interpreting the results
- CAGR smooths volatility; always review the year-by-year path alongside it.
- For investments with interim contributions or withdrawals, use IRR instead of CAGR.
Frequently asked questions
How is CAGR calculated?
CAGR equals the ending value divided by the beginning value, raised to the power of one divided by the number of years, minus one. It is the constant annual rate that would turn the beginning value into the ending value.
Why does CAGR differ from the average annual growth rate?
The arithmetic average of year-over-year rates ignores compounding and overstates growth when results are volatile. CAGR is the geometric rate and is the correct measure for multi-year growth.
Can CAGR be calculated with a negative or zero starting value?
No. CAGR requires positive beginning and ending values. For series that cross zero, analyze absolute changes or use a different growth measure.
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