CAGR Calculator.
Measure Real Growth Rate.
Calculate the compound annual growth rate of any investment — the single number that tells the true story.
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CAGR Results
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What is CAGR?
CAGR (Compound Annual Growth Rate) measures the mean annual growth rate of an investment over a specified time period longer than one year. It represents one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time.
CAGR Formula
CAGR = [(Final Value / Initial Value)^(1/n) - 1] × 100Where n = number of years
Why Use CAGR?
- Smooths Volatility: CAGR ignores market ups and downs to show true growth
- Easy Comparison: Compare different investments on an apples-to-apples basis
- Realistic Returns: Shows actual compounded returns, not simple averages
- Long-term View: Perfect for evaluating multi-year investment performance
CAGR vs Absolute Returns
Shows annualized growth rate. A 100% return over 5 years = ~14.9% CAGR
Shows total percentage gain. $10,000 growing to $20,000 = 100% absolute return
How to Calculate CAGR in Excel
No built-in CAGR function exists in Excel, but you can calculate it easily using the standard formula. Here are three methods:
Method 1 — Direct Formula
=(End_Value/Start_Value)^(1/Years)-1Example: =（B2/B1)^(1/A2)-1 where B1=start, B2=end, A2=number of years. Format as percentage.
Method 2 — Using RATE function
=RATE(Years,0,-Start_Value,End_Value)The RATE function solves for the periodic interest rate. Set pmt=0 for lump sum investments.
Method 3 — CAGR Calculator Excel Formula with POWER
=POWER(End_Value/Start_Value,1/Years)-1Same result as Method 1 but uses the POWER function. Both are valid compound annual growth rate Excel formulas.
Year-over-Year Growth vs CAGR
Year-over-year (YoY) growth measures change between two consecutive years. CAGR smooths multiple years into one annualized rate. For a year over year growth calculator in Excel: =（Current_Year-Prior_Year)/Prior_Year
What is a Good CAGR?
Benchmarks vary by asset class. Here's what different CAGR values mean in practice:
S&P 500 (historical)
Long-run average including dividends
Large-cap equity funds
Reasonable 10-year expectation
Real estate (US)
Appreciation only, excludes rental yield
US Treasury bonds
Lower risk, lower return
Rule of 72 — double in 7 yrs
Interest rate to double money in 7 years
Rule of 72 — double in 10 yrs
Divide 72 by years to get required CAGR
Frequently Asked Questions
What is CAGR and why is it important?▾
CAGR (Compound Annual Growth Rate) measures the steady annual rate at which an investment grows from its beginning value to its ending value. Unlike simple returns, CAGR smooths out volatility to give a single annualized growth figure, making it easy to compare different investments over different time periods.
What is considered a good CAGR for investments?▾
For equity mutual funds, a CAGR of 12–15% over 10+ years is considered good. Index funds typically deliver 10–12% CAGR long-term. For individual stocks, 15–20%+ CAGR over 5 years is excellent. FD and debt funds typically return 6–8% CAGR. Always compare CAGR against inflation (6–7% in India) to see real returns.
How is CAGR different from absolute returns?▾
Absolute return only measures the total % gain from start to end (e.g. 100% gain). CAGR annualizes this — a 100% gain over 5 years equals 14.87% CAGR. CAGR is more useful for comparing investments held over different durations because it accounts for the time value of money.
Can CAGR be negative?▾
Yes, CAGR can be negative if the ending value is less than the starting value. For example, if you invested ₹1,00,000 and it is worth ₹70,000 after 3 years, the CAGR is approximately -11.3%. Negative CAGR indicates the investment lost value on an annualized basis.
What does CAGR mean?▾
CAGR stands for Compound Annual Growth Rate. It is the rate at which an investment grows from its starting value to its ending value, assuming profits are reinvested each year. CAGR gives you a single annualized figure that represents steady growth — it's the most common way to compare investment performance across different time periods.
How do I calculate CAGR in Excel?▾
Use the formula =(End_Value/Start_Value)^(1/Years)-1. For example, if an investment grew from $10,000 to $18,000 over 6 years: =(18000/10000)^(1/6)-1 = 10.3% CAGR. Format the cell as a percentage. You can also use the POWER or RATE functions as alternatives.
What interest rate would double your money in 5 years?▾
Using the Rule of 72: divide 72 by the number of years to approximate the required CAGR. For 5 years: 72 ÷ 5 = ~14.4% annual growth rate. More precisely, the answer is (2)^(1/5) - 1 = 14.87% CAGR. At 10% CAGR, money doubles in about 7.2 years.
What is semi-annual compounding?▾
Semi-annual compounding means interest is calculated and added to the principal twice per year. The effective annual rate (EAR) is higher than the nominal rate. Formula: EAR = (1 + r/2)^2 - 1. For example, a 10% nominal rate compounded semi-annually yields an EAR of (1.05)^2 - 1 = 10.25%.
How is revenue CAGR used in business analysis?▾
Revenue CAGR measures how fast a company's revenue is growing year over year on a compounded basis. Analysts use it to compare growth rates across companies regardless of size. A SaaS company with 35% revenue CAGR over 5 years is growing much faster than a mature company at 3% CAGR. It's the standard metric in earnings reports and investor presentations.
Related Investment Guides
Go deeper: CAGR vs IRR Calculator — see when each return metric applies.