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Compound Annual Growth Rate (CAGR) Calculator
Calculates compound annual growth rates (CAGR) to evaluate smoothed annualized business and revenue growth.
Compound Annual Growth Rate (CAGR) Calculator
Measures the geometric annualized rate of investment, company revenue, or asset value growth
Benchmarks:
Calculated CAGR Rate
20.11% / yr
Geometric Mean Smoothed Annual Compounding
Total Growth+150%
Absolute Gain+$15,000
Next Year Projection$30,028.11
Smoothed Compounding Curve:t = 0 to 5 years
CAGR = [ ($25,000 / $10,000)^(1 / 5) - 1 ] × 100% = 20.11%/year
What is CAGR?
Compound Annual Growth Rate (CAGR) represents the mean annual growth rate of an investment over a specified period of time longer than one year, smoothing out market volatility.
Formula & Step-by-Step Calculation
CAGR = [ (Ending Value / Beginning Value)^(1 / n) - 1 ] × 100%
Geometric mean growth rate across n years.
Worked Step-by-Step Examples
Example 1
A business grew from $10,000 to $25,000 over 5 years
Solution: CAGR = 20.11% per year (+150.0% total growth)
• (25,000 / 10,000)^(1/5) - 1 = 2.5^0.2 - 1 = 1.2011 - 1 = 20.11%
Common Real-World & Academic Use Cases
- ✓ Evaluating company revenue and profit growth trends
- ✓ Benchmarking mutual fund and ETF multi-year returns
- ✓ Industry market size expansion forecasts
How to Use the Compound Annual Growth Rate (CAGR) Calculator
1
Enter Initial & Final Values
Input beginning and ending numbers.
2
Enter Time Period
Specify total number of years.
3
Inspect CAGR
Review annualized growth percentage.
Frequently Asked Questions
Q: Does CAGR account for risk or volatility?
No, CAGR is an imaginary smoothed metric that assumes steady year-over-year compounding without fluctuations.