Free tool

CAGR calculator

CAGR is the steady yearly rate that turns a starting value into an ending one. Enter both and the number of years; the sheet gives the rate and what it means for the years ahead.

fx=(B3/B2)^(1/B4)-1
AB
1Growth
2Start value
3End value
4Years
5CAGR10.00%
6Same with RRI10.00%
7Total growth61.05%
8
9Projection at that rate
10Years ahead
11Projected value21,435.89

Blue cells are inputs: type a new value and the sheet recomputes. Click a result to see its formula.

The formulas

How it works, step by step

=(B3/B2)^(1/B4)-1
The CAGR formula. Divide the end value by the start value, raise it to the power 1 / years, and subtract 1. From 10,000 to 16,105.10 in 5 years is exactly 10% a year.
=RRI(B4,B2,B3)
The same with RRI. RRI is the built-in function for it: the number of periods, the start value and the end value. It also works per month or per quarter if you give it that number of periods.
=B3/B2-1
Total growth is not CAGR. The value grew 61% in total, but 61 / 5 = 12.2% overstates the yearly rate, because each year grows on top of the last. CAGR accounts for that compounding.
=B3*(1+B5)^B10
Projecting forward. Grow the last value by (1 + CAGR) once per year ahead. Three more years at 10% takes 16,105.10 to about 21,435.89. A projection assumes the past rate continues, which it rarely does exactly.

Functions used here

RRIEquivalent interest rate for growthPOWERBase raised to a powerFVFuture value of an investmentRATEInterest rate per period of an annuity

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FAQ

Questions

How do you calculate CAGR?

CAGR = (end value / start value)^(1 / years) − 1. From 10,000 to 16,105.10 over 5 years: 1.61051^(0.2) − 1 = 10%.

What is a good CAGR?

It depends on what is growing. Compare it with the same measure for similar companies, investments or markets over the same years, and with inflation over that time.

Why is CAGR lower than the average yearly growth?

An average of yearly percentages ignores compounding and is pulled up by volatile years. CAGR is the one constant rate that ends at the same value, so it is the fairer single number.

Can I calculate CAGR over months?

Yes. Use the number of months as the periods to get a monthly rate, then (1 + monthly rate)^12 − 1 for the yearly equivalent.

What if the start value is zero or negative?

CAGR is not defined then: you cannot grow from nothing at a percentage rate. Start from the first period with a positive value instead.

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