The CAGR calculator finds the single steady growth rate that would carry a starting value to an ending value over a set number of years — the standard way to compare growth across investments, companies and time periods.
The formula
CAGR = (End ÷ Start)^(1/years) − 1. The exponent is what makes it “compound”: it accounts for growth building on growth, which a simple average ignores. That’s why a stock that doubles then halves has a simple average return of +25% but a CAGR of 0% — CAGR tells the truth.
Worked example
Revenue grows from $100K to $250K over 5 years. CAGR = (250 ÷ 100)^(1/5) − 1 = 20.1% per year. Total growth was 150%, but “20% a year, compounded” is the honest headline — and the number a buyer or investor will actually use.
How to read the result
CAGR smooths the path — a business that grew 60% then shrank 10% shows the same CAGR as one that grew steadily, but they are very different businesses. Always look at the year-by-year path alongside the CAGR. To run the projection forward instead of backward, the compound interest calculator does exactly that.
What is a good CAGR for a company?
Mature public companies often grow revenue at 5-10% CAGR; strong growth companies 20%+; early-stage startups are judged on much higher rates from small bases.
Why use CAGR instead of average growth?
Simple averages overstate volatile returns — up 100% then down 50% averages +25% but leaves you exactly where you started. CAGR reflects the real compounded outcome.
Can CAGR be negative?
Yes — if the ending value is below the start, CAGR is negative, expressing the steady annual rate of decline.
Does CAGR work for periods under a year?
The formula still computes, but annualising a few months of data extrapolates aggressively — treat sub-year CAGRs with suspicion.