CAGR Calculator - Compound Annual Growth Rate Calculator
Free online CAGR calculator. Calculate the Compound Annual Growth Rate of your investments, business revenues, and portfolios with year-by-year compounding breakdowns.
Inputs
🔒 Local Processing| Year | ProjectedValue | CumulativeGain |
|---|---|---|
| Year 1 | $5,957 | $957 |
| Year 2 | $7,097 | $2,097 |
| Year 3 | $8,455 | $3,455 |
| Year 4 | $10,073 | $5,073 |
| Year 5 | $12,000 | $7,000 |
How to Use This Calculator
- Enter the initial beginning valuation of the asset or investment portfolio.
- Enter the final ending valuation at the conclusion of the holding period.
- Specify the total number of elapsed years between the two measurements.
Formula & Mathematical Method
Where Final Value is the ending balance, Initial Value is the starting capital, and n is the total number of years elapsed. Expressed as a percentage by multiplying by 100.
CAGR = [ (Final Value / Initial Value)^(1 / n) ] - 1Explanation of Variables
| Symbol | Variable Name | Description & Role in Calculation |
|---|---|---|
| V_begin | Beginning Valuation | Asset value at the start of the measured timeframe. |
| V_end | Ending Valuation | Asset value at the conclusion of the measured timeframe. |
| t | Time Horizon (Years) | Number of full or fractional years between the two dates. |
Worked Calculation Examples
5-Year Investment Doubling
Scenario: $5,000 invested grows to $10,000 over 5 years.
SaaS Business Revenue Scale
Scenario: Annual Recurring Revenue (ARR) increases from $100k to $1M in 4 years.
Interpretation of Results
Compound Annual Growth Rate (CAGR) represents the smoothed annual rate at which an investment would have grown if it grew at a steady constant rate. It eliminates short-term market noise to reveal true underlying geometric growth.
CAGR (%)
The constant annualized geometric growth rate linking beginning and ending valuations.
Key Context: Use CAGR to objectively compare volatile equities against stable fixed-income assets.
Practical Use Cases
Multi-Year Portfolio Performance Benchmarking
Measure the true annualized return of stock portfolios over 3, 5, or 10-year horizons.
Corporate Revenue & Growth Tracking
Analyze company compound revenue growth across multi-year fiscal reporting cycles.
Limitations & Key Assumptions
- CAGR implies smooth exponential growth and completely obscures interim volatility, crashes, or peak drawdowns.
- Assumes no capital was added or withdrawn during the measurement period; does not substitute for Money-Weighted Rate of Return (IRR).