Growth Rate (CAGR) Calculator
Enter a starting value, an ending value and the number of years to find the steady yearly growth rate that would get you there.
Growth Rate (CAGR)
What Is Growth Rate?
Growth rate measures the percentage change in a value over a specific period. It helps compare how quickly something is increasing or decreasing, such as revenue, population, or investment value.
What Is CAGR (Compound Annual Growth Rate)?
Compound Annual Growth Rate (CAGR) is a standardized way to measure growth over multiple years. It shows the average annual growth rate of an investment or value, assuming it grows at a steady rate.
Unlike simple growth rate, CAGR smooths out fluctuations and provides a clearer long-term trend.
CAGR Formula
CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Number of Years) − 1
- Beginning Value = initial amount
- Ending Value = final amount
- Number of Years = time period
Example of CAGR Calculation
If an investment grows from 1,000 to 2,000 over 5 years:
CAGR = (2000 ÷ 1000)^(1 ÷ 5) − 1
CAGR = (2)^(0.2) − 1
CAGR ≈ 14.87% annual growth
Where Growth Rate and CAGR Are Used
Finance and Investing
Stock returns, mutual funds, business revenue growth
Business Analysis
Revenue growth, customer base, market share
Economics
GDP growth, inflation trends, industry expansion
Population Studies
Population growth and urban development rates
Common Mistakes in Growth Rate Calculations
- Using incorrect time periods
- Confusing total growth with annual growth
- Ignoring compounding effects
- Misinterpreting short-term spikes as long-term growth
Calculate growth rate or CAGR between two values over time — for business metrics, investments, and population data.
Formula
CAGR = (ending ÷ beginning)^(1 ÷ years) - 1. Simple growth = (ending - beginning) ÷ beginning.
Reference Values
- •$100 → $200 in 5 years = 14.9% CAGR
- •CAGR smooths volatility
- •Rule of 72: 72 ÷ rate = doubling years
FAQ
Common questions about Growth Rate Calculator
How we calculate this
We use the standard published formula for this calculation, and we show the working so you can check it.
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