Business math, made visible
CAGR calculator
CAGR calculator
Turn a beginning and ending value into a steady annual rate.
Inputs stay in this browser. Results use your entries and the formula below.
This CAGR calculator finds the constant annual growth rate that connects a beginning value to an ending value over the elapsed years. You can use matching business revenue figures or another consistently measured positive series. The formula follows the Federal Reserve Bank of Chicago explanation. The worked example uses the SEC compound-interest illustration. This rate summarizes the endpoints; it does not reproduce the actual path between them or remove the effect of money added during the period.
Worked example
| Source item | Published value |
|---|---|
| Beginning amount | $100 |
| Amount at the end of the second year | $110.25 |
| Stated annual interest rate | 5% |
Investor.gov illustrates $100 compounding to $110.25 at the end of the second year. Entering those endpoints and two elapsed years produces a 5% CAGR. The example demonstrates compounding, not a forecast for business revenue. Source: SEC Investor.gov: compound-interest worked example.
How it works
CAGR (%) = ((ending value / beginning value) ^ (1 / elapsed years) - 1) * 100
Formula basis: Federal Reserve Bank of Chicago: CAGR formula, figure 1 notes. Ratios are converted to percentages for display. Intermediate values retain full calculation precision; displayed amounts are rounded.
Count elapsed years between the values
Use the amount of time separating the beginning and ending observations. The count of labels or observations is not necessarily the elapsed period. You may enter a positive fractional year when the endpoints are separated by part of a year. Keep the annual unit consistent. Entering a count of months in a field labeled years would change the annualized rate and misstate the period.
Use matching endpoint definitions
Compare the same business measure, currency, and scale at both endpoints. A change from gross to net revenue or from ordinary dollars to thousands would be interpreted as growth even though the measurement changed. For an investment balance, extra deposits or withdrawals also change the ending value. This tool does not separate those cash flows from growth, so use a cash-flow-aware method when those movements matter.
Read decline and zero ending value
A positive beginning value is required. A lower nonnegative ending value produces a negative CAGR. Equal endpoint values produce no compound growth. A zero ending value describes a full decline in this endpoint model. Negative beginning or ending values are not supported because they do not give the positive-value compound-growth interpretation used here. The result is a smoothed summary, not a promise that the same rate occurred each year.
Use the formula in a spreadsheet
With beginning value in A1, ending value in B1, and elapsed years in C1, use =(B1/A1)^(1/C1)-1 and format as a percentage. Use the same elapsed period as the calculator. The spreadsheet formula returns a fraction before percentage formatting.
Frequently asked questions
What is the CAGR formula?
Divide ending value by beginning value, raise the ratio to one divided by elapsed years, then subtract one. Express the result as a percentage.
How do I calculate CAGR for revenue?
Use matching revenue figures at the beginning and end, with elapsed years between them. Keep the scope, currency, and accounting definition consistent.
How do I calculate CAGR in Excel?
Use =(B1/A1)^(1/C1)-1 with beginning value, ending value, and elapsed years in those cells. Apply percentage formatting.
Can CAGR be negative?
Yes. A lower ending value gives negative compound growth when the beginning value is positive. Negative endpoint amounts themselves are unsupported.
Can I use this for monthly contributions?
An ending balance with additional deposits includes those deposits as apparent growth. This endpoint calculator does not adjust for intermediate contributions.
Is CAGR an average of annual percentages?
It is the constant compounded rate that links the two endpoints. It does not calculate the arithmetic average of individual annual changes.
Sources
- Federal Reserve Bank of Chicago: CAGR formula, figure 1 notes
- SEC Investor.gov: compound-interest worked example
Data as of 2026-10-05. Examples are historical teaching examples, not current prices or market benchmarks. Calculated results are derived from entered values.
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