CAGR Calculator
Calculate compound annual growth rate from initial value, final value and years. Free CAGR calculator with year-by-year growth table and reverse mode.
About the CAGR Calculator
CAGR — compound annual growth rate — is the single steady yearly rate at which an investment would need to grow to get from its starting value to its ending value over a given number of years. This free CAGR calculator applies the standard formula CAGR = (final value ÷ initial value)^(1/years) − 1 and shows the result live, along with total growth and a year-by-year projection table.
CAGR smooths out volatility, which makes it the fairest way to compare investments held for different lengths of time: a mutual fund that doubled in 6 years, a stock that tripled in 10, a business whose revenue grew from 2 crore to 7 crore in 4 years. Investors, analysts and business owners across Pakistan, India and worldwide use it to compare funds, stocks, property and company growth on a like-for-like basis.
The calculator also works in reverse: enter a starting amount, an expected CAGR and a number of years to project the future value. Everything computes in your browser with no signup, so you can test scenarios freely.
How to Use the CAGR Calculator
- 1Enter the initial value of the investment and its final value.
- 2Enter the number of years between the two values (decimals allowed, e.g. 2.5).
- 3Read the CAGR percentage, total growth and the year-by-year table.
- 4Use the reverse section to project a future value from an expected CAGR.
Frequently Asked Questions
How is CAGR calculated with an example?
CAGR = (final ÷ initial)^(1/years) − 1. If 100,000 grows to 250,000 in 5 years, CAGR = (2.5)^(1/5) − 1 = 20.11% per year. That means growing 20.11% each year for 5 years, compounded, turns 100,000 into exactly 250,000.
What is the difference between CAGR and average annual return?
A simple average ignores compounding and overstates growth. If an investment gains 50% one year and loses 50% the next, the simple average is 0% but you actually lost 25% of your money — the CAGR is about −13.4% per year. CAGR always reflects the true start-to-end outcome.
What is a good CAGR for an investment?
Context matters. Broad stock-market index funds have historically delivered roughly 10-15% CAGR in markets like Pakistan and India (in local currency) over long periods, while bank deposits are far lower. A business growing revenue at 25%+ CAGR is generally considered fast-growing. Compare against inflation and alternatives with similar risk.
Can CAGR be negative?
Yes. If the final value is lower than the initial value, CAGR is negative. For example, 200,000 falling to 150,000 over 3 years gives a CAGR of (0.75)^(1/3) − 1 = −9.14% per year, meaning the investment shrank about 9.14% annually.
Does CAGR work for periods shorter or longer than whole years?
Yes — use fractional years. For 18 months, enter 1.5 years. Note that annualising very short periods can be misleading: a 10% gain in 3 months implies a 46% CAGR, but there is no guarantee that pace continues for a full year.