CAGR Calculator
Enter a compound annual growth rate, the number of periods and the starting value to project the final value.
Updated
CAGR Calculator
Our CAGR Calculator projects where a value ends up if it grows at a steady compound annual growth rate. Enter the CAGR, the number of years (or other periods) and the starting value, and the final value appears at once with the difference, the total growth and the figure you would reach without compounding. Use it to test return assumptions for an investment, a savings goal or a business plan.
Quick answer
Final value = initial × (1 + CAGR)^n: 1,500 × 1.08^5 ≈ 2,203.99, a total growth of about 46.93%.
- CAGR: the steady yearly growth rate, entered as a percent.
- n: the number of periods, usually years.
- Total growth: (final ÷ initial − 1) × 100, more than CAGR × n.
- Finding CAGR instead: (final ÷ initial)^(1 ÷ n) − 1.
What Is CAGR?
The compound annual growth rate (CAGR) is the single yearly rate that takes a value from where it started to where it ended, as if it grew by the same percentage every year with each year building on the last. Real returns jump around; CAGR smooths them into one rate. This calculator uses it forwards, to project a final value from a rate:
= Initial × (1 + CAGR ÷ 100)^n
Rearranged, the same formula finds the CAGR when you already know both values:
− 1
For that direction, use our Revenue Growth Rate Calculator or the Annualized Rate of Return Calculator for a single period.
How to Project a Value With CAGR
An investment of 1,500 grows at a CAGR of 8% for 5 years:
1.08^5 ≈ 1.4693
1,500 × 1.4693 ≈ 2,203.99
- Turn the rate into a growth factor. 8% becomes 1.08.
- Raise it to the number of years. 1.08^5 ≈ 1.4693, so the value grows about 1.47 times.
- Multiply by the initial value. 1,500 × 1.4693 ≈ 2,203.99.
- Find the difference and total growth. 2,203.99 − 1,500 = 703.99, and 703.99 ÷ 1,500 ≈ 46.93%.
| Year | Value at 8% |
|---|---|
| Year 0 | 1,500.00 |
| Year 1 | 1,620.00 |
| Year 2 | 1,749.60 |
| Year 3 | 1,889.57 |
| Year 4 | 2,040.73 |
| Year 5 | 2,203.99 |
CAGR Examples
| Initial, CAGR, years | Final value |
|---|---|
| 1,500 at 8%, 5 years | 2,203.99 |
| 50,000 at 12%, 7 years | 110,534.07 |
| 10,000 at 6%, 20 years | 32,071.35 |
| 20,000 at −5%, 3 years | 17,147.50 |
At 12% for 7 years, 50,000 more than doubles to 110,534.07, a total growth of about 121.07%. A negative CAGR works the same way: losing 5% a year for 3 years leaves 20,000 at 17,147.50.
Why Compounding Matters Over Time
Without compounding, 10,000 growing 6% a year would gain a flat 600 a year and reach 22,000 after 20 years. With compounding each year's 6% is earned on a larger balance, and it reaches 32,071.35. The calculator shows both: the final value and the "Without compounding" row.
A quick check is the rule of 72: divide 72 by the CAGR to estimate how many years it takes to double. At 8% that is about 9 years (the exact figure is 9.01), and at 6% about 12 years (exactly 11.9).
CAGR vs Average Annual Return
An average of yearly returns can be far from the growth you actually got. Suppose an investment doubles in year 1 (+100%) and halves in year 2 (−50%):
- Average return: (100% − 50%) ÷ 2 = 25% a year.
- CAGR: (2 × 0.5)^(1/2) − 1 = 0%, because the value ended where it started.
CAGR is the honest figure for projections, so enter a CAGR here rather than an average of yearly returns.
Limitations and Common Mistakes
- Real growth is uneven. A projection at a steady CAGR shows a smooth path that markets rarely follow.
- Past CAGR is not a forecast. A fund that grew 12% a year may not keep doing so.
- Matching units. If the rate is per year, the periods must be years. A monthly rate needs months.
- Inflation, fees and taxes. Use a rate after these costs if you want what the money will be worth to you.
- Extra deposits. The formula grows one starting value. Regular contributions need a future value of annuity calculation.
Key Terms
- CAGR
- Steady compound growth rate per year.
- Initial value
- The value at the start.
- Final value
- Initial × (1 + CAGR)^n.
- Total growth
- (Final ÷ initial − 1) × 100.
- Rule of 72
- 72 ÷ CAGR ≈ years to double.
How to Use the CAGR Calculator
- Enter the CAGR. Type the compound annual growth rate as a percent, such as 8. It can be negative but must be more than −100%.
- Enter the periods and initial value. Type the number of periods, such as 5 years, and the starting value, such as 1,500.
- Read and copy the result. The final value appears as you type, with the working, the difference, the total growth and the value without compounding. Press Copy to copy it, or Clear or Esc to start again.
Example: a CAGR of 12%, 7 periods and an initial value of 50,000. The final value is about 110,534.07, a difference of 60,534.07 and a total growth of about 121.07%.
Who Can Use This Calculator?
Frequently Asked Questions (FAQs)
What is CAGR?
CAGR, the compound annual growth rate, is the steady yearly rate that takes a value from its start to its end, assuming each year compounds on the one before.
How do you calculate the final value from CAGR?
Multiply the initial value by (1 + CAGR ÷ 100) raised to the number of years. For 1,500 at 8% for 5 years: 1,500 × 1.08^5 ≈ 2,203.99.
What is the CAGR formula?
CAGR = (final value ÷ initial value)^(1 ÷ n) − 1, where n is the number of years. This calculator uses the same formula the other way round to find the final value.
Why is total growth more than CAGR times the number of years?
Because growth compounds. 8% for 5 years is about 46.93% in total, not 40%, since each year grows on the larger balance of the year before.
Can CAGR be negative?
Yes. A negative CAGR means the value shrank on average. 20,000 at −5% for 3 years ends at 17,147.50.
Is CAGR the same as the average annual return?
No. An average of yearly returns ignores compounding. +100% then −50% averages 25%, but the CAGR is 0% because the value ends where it started.
Can I use months or quarters instead of years?
Yes, as long as the rate is for the same period. A monthly rate needs the number of months.
Is the CAGR Calculator free?
Yes. It is completely free, needs no sign-up, and can be used as many times as you like.
Sources
- Wikipedia. Compound annual growth rate.
- Corporate Finance Institute. CAGR (Compound Annual Growth Rate).
- Wall Street Prep. CAGR Formula and Calculations.
- Investor.gov (SEC). Compound Interest Calculator.
- Wikipedia. Rule of 72.
Use our CAGR Calculator to see what steady compound growth turns your starting value into in seconds.