CAGR Calculator

A CAGR calculator finds the steady yearly rate that turns a start value into an end value: CAGR = (End ÷ Start)^{1 ÷ n} − 1, where n is the number of years. If $10,000 grew to $25,000 in 5 years, 2.5^{1 ÷ 5} − 1 ≈ 0.2011, so the compound annual growth rate is 20.11% a year.

How to use the CAGR calculator

1. Pick what you want to find: the CAGR, the end value at a given CAGR, the time needed to reach a target, or the annualized return of several dated cash flows (XIRR).
2. Type the start value and the end value. Enter the period in years, or switch to Dates to use the exact start and end dates.
3. For an account with deposits or withdrawals along the way, use the Cash flows tab: list each amount you put in as Invested and each amount you took out, plus the current value, as Received.
4. Read the answer, then open Show steps to see the logarithms and exponents worked with your numbers. The chart and the year-by-year table show the smooth growth path.

CAGR formula

CAGR = (End value ÷ Start value)^{1 ÷ n} − 1

• End value ÷ Start value is the growth multiple. A value that went from $10,000 to $25,000 has a multiple of 2.5.
• n is the time in years. It can be a decimal: 30 months is 2.5 years, and with exact dates n = days ÷ 365.
• 1 ÷ n as an exponent takes the n-th root, which spreads the total growth evenly over the years.

Rearranging the same equation answers the other two questions on the calculator:

• End value = Start × (1 + CAGR)ⁿ
• Years = ln(End ÷ Start) ÷ ln(1 + CAGR)

How logarithms and exponents give the CAGR

Raising 2.5 to the power 1/5 is hard to do in your head, so the calculator shows it with natural logarithms, the same way a scientific calculator works inside:

1. Take the log of the multiple: ln(2.5) ≈ 0.916291.
2. Divide by the number of years: 0.916291 ÷ 5 ≈ 0.183258.
3. Undo the log with e^x: e^0.183258 ≈ 1.201124. This is 1 + CAGR, the yearly growth factor.
4. Subtract 1: 0.201124, or 20.11% a year.

Check it: 10,000 × 1.201124⁵ ≈ 25,000. The log rule ln(aⁿ) = n × ln(a) is also what brings n down from the exponent when you solve for the number of years.

Worked example: CAGR between two dates

An investment worth $10,000 on January 1, 2020 is worth $25,000 on July 1, 2025. Count the days: 2,008. Divide by 365 to get n ≈ 5.5014 years. Then 2.5^{1 ÷ 5.5014} − 1 ≈ 0.1812, so the CAGR is about 18.12% a year. The extra half year lowers the rate from 20.11%, because the same growth is spread over more time.

Worked example: how long to double at 7%

To grow $10,000 into $20,000 at a CAGR of 7%, solve 1.07ⁿ = 2. Take logs: n = ln 2 ÷ ln 1.07 ≈ 0.693147 ÷ 0.067659 ≈ 10.24 years. The rule of 72 gives a quick estimate of 72 ÷ 7 ≈ 10.3 years, very close.

Worked example: a negative CAGR

A value that fell from $5,000 to $4,000 in 3 years has a multiple of 0.8. Then 0.8^{1 ÷ 3} − 1 ≈ −0.0717, a CAGR of −7.17% a year. A negative CAGR means the value shrank on average. If the end value is 0, the CAGR is −100%.

CAGR vs average annual return

The simple average adds up the yearly returns and divides by the number of years. It can mislead badly. Suppose $100 gains 50% in year 1 (to $150) and then loses 50% in year 2 (to $75). The average of +50% and −50% is 0%, yet you lost money. The CAGR tells the truth: (75 ÷ 100)^{1 ÷ 2} − 1 ≈ −13.40% a year. The calculator shows both figures so you can see the gap.

CAGR when you add or withdraw money

CAGR uses only a start value and an end value, so it cannot handle deposits or withdrawals along the way. Adding $5,000 to an account raises its end value without any growth at all. The right measure is the internal rate of return (IRR): the single yearly rate at which the present values of all cash flows add to zero. When the flows happen on irregular dates, it is called XIRR, as in spreadsheet software.

No formula solves this equation for the rate directly, so the Cash flows tab uses Newton’s method, starting from a 10% guess, and falls back to bracketing and bisection if Newton’s method does not settle. Microsoft’s XIRR help page uses this example: −$10,000 on January 1, 2008, then +$2,750, +$4,250, +$3,250 and +$2,750 received through April 1, 2009. The answer is 37.34%, and the calculator gives the same result. In the calculator’s default example, $15,000 invested in two steps, a $2,000 withdrawal and a final value of $18,500 give an XIRR of about 6.17% a year.

CAGR needed to multiply your money

Each cell is (multiple)^{1 ÷ years} − 1, rounded to two decimals.

Common CAGR mistakes

• Dividing the total growth by the years. 150% over 5 years is not 30% a year; compounding makes it 20.11%.
• Counting the number of yearly values instead of the years between them. Values for 2020 through 2025 are six numbers but five years of growth.
• Ignoring deposits. New money is not growth. Use XIRR when cash went in or out.
• Treating a past CAGR as a promise. CAGR smooths over the ups and downs. The real path may have had large drops, and future growth can be very different.
• Using a start value of zero or a negative value. The ratio has no meaning there, so CAGR cannot be computed.

Where CAGR is useful

CAGR compares things that grew over different lengths of time: two funds held for 4 and 7 years, a company’s revenue over a decade, the growth of a city’s population, or the number of users of an app. It is also the right rate to plug into the end-value formula when you want a rough projection, as long as you remember the projection assumes the same rate every year. Results on this page are estimates for learning and planning and are not investment advice. The SEC’s Investor.gov site reminds investors that all investments involve some degree of risk.

Sources

Checked in November 2026.

• Microsoft Support: XIRR function (365-day year, worked example)
• SEC Investor.gov: What is compound interest?
• SEC Investor.gov: What is Risk?

CAGR practice quiz: 10 questions

Test yourself with 10 multiple-choice questions. Choose an answer and press Submit to see if you are right and why. Your score appears at the end.

Frequently asked questions

How do you calculate CAGR?

Divide the end value by the start value, raise the result to the power 1 ÷ n (n = years), and subtract 1. For $10,000 that grew to $25,000 in 5 years: 2.5^0.2 − 1 ≈ 20.11% a year.

What is a good CAGR?

There is no single good number. Compare a CAGR with other options over the same years and with similar risk, such as a savings account, a bond fund or a market index. A higher CAGR in the past usually came with larger swings along the way.

Can CAGR be negative?

Yes. If the end value is below the start value, the multiple is less than 1 and the CAGR is negative. From $5,000 to $4,000 in 3 years the CAGR is about −7.17% a year.

How do I calculate CAGR in Excel?

Use =(End/Start)^(1/n)-1, for example =(25000/10000)^(1/5)-1, which returns about 0.2011. Excel's RRI function gives the same answer: =RRI(5,10000,25000). For dated deposits and withdrawals, use XIRR.

What is the difference between CAGR and IRR?

CAGR uses one start value and one end value. IRR, and XIRR with exact dates, uses every cash flow and its timing, so it is the right measure when money was added or withdrawn. With only one deposit and one final value, the two give the same rate.

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