Free CAGR Calculator
Calculate the compound annual growth rate between a starting and ending value over any number of years, or project a value forward at a constant rate.
At this rate the value doubles roughly every 10.0 years.
What CAGR measures
The compound annual growth rate is the steady annual rate that would take a starting value to its ending value over a given number of years. Real results are never that smooth, but the single rate makes different businesses and time periods comparable. It is the standard way to read the growth of revenue, earnings, free cash flow, or an investment, precisely because it respects compounding rather than averaging it away.
How to use this calculator
- Use Find the rate to turn a beginning value, an ending value, and a number of years into a compound annual growth rate.
- Use Project forward to grow a starting value at a constant rate and see what it becomes.
- Read the doubling time as an intuition check. A 7% rate doubles a value in about ten years; a 15% rate does it in under five.
Why a compound rate beats an average
Averaging annual growth rates overstates the real outcome. A year of +50% followed by a year of −50% averages to zero, but the value has actually fallen 25%. CAGR reflects the true start-to-finish path, which is why it is harder to game and why serious analysis relies on it. One caution: a CAGR is only as honest as its endpoints. Pick a starting or ending year at a cyclical extreme and the figure flatters or punishes the business unfairly. Read it alongside the year-by-year series.
Using CAGR in valuation
A reverse discounted cash flow tells you the growth rate today's price assumes. A CAGR tells you what the business has actually delivered. Comparing the two is one of the fastest reality checks in investing. If the price implies 20% annual growth for a decade and the company has compounded revenue at 6%, the market is demanding a great deal. If the implied growth sits below the historical record, the market may be too cautious.
Related calculators
- Reverse DCF calculator — find the growth the current price assumes, then compare it to the historical CAGR.
- DCF calculator — feed a growth assumption into a two-stage discounted cash flow to estimate intrinsic value.
Frequently asked questions
- What is CAGR?
- CAGR, the compound annual growth rate, is the single annual rate at which a value would have grown to reach its ending figure if it had grown steadily every year. It smooths out the lumpiness of year-to-year results into one comparable number. The formula is the ending value divided by the beginning value, raised to the power of one over the number of years, minus one.
- How do I calculate CAGR?
- Enter the beginning value, the ending value, and the number of years. The calculator raises the ratio of the two values to the power of one divided by the years and subtracts one. For example, growing from 100 to 200 over ten years is roughly a 7.2 percent CAGR, not 10 percent, because growth compounds.
- Why use CAGR instead of average growth?
- A simple average of annual growth rates overstates the real result, because it ignores compounding and is distorted by a single big up or down year. CAGR reflects the actual start-to-finish path, which is why it is the standard way to compare the growth of revenue, earnings, or an investment over time.
- How does CAGR help in valuation?
- A reverse discounted cash flow tells you the growth rate the current price assumes. CAGR tells you what the business has actually delivered. Comparing the two is one of the fastest reality checks in investing: if the price implies growth far above the historical CAGR, the market is demanding a lot.
This calculator is for education and research only. It is not investment advice and it does not recommend buying or selling any security. The output depends entirely on the assumptions you enter.