CAGR Calculator
Find the equivalent compound annual growth rate from two positive endpoints and a clearly chosen time unit.
Annual CAGR
- Starting value
- Ending value
- Elapsed time
- Annual periods
How this annual rate is calculated
More calculation digits
Use the result in Excel
Excel's RRI returns a decimal rate per supplied period. The period count above is in years; format the Excel cell as a percentage to display an annual rate.
CAGR smooths the start and end into one equivalent annual rate. It does not show the actual year-by-year path, interim contributions or withdrawals, volatility, or a future return. Use a cash-flow method such as IRR for irregular cash flows.
Your values are calculated locally and are not uploaded. Copies and text downloads go only where you choose. New calculations and text exports work after you disconnect, once the page has loaded.
Calculate one equivalent annual rate
Compound annual growth rate (CAGR) compresses a positive starting value, positive ending value and elapsed time into one equivalent annual compounded rate. The values must use the same unit, but that unit can be dollars, shares, customers or another consistent measure. A falling ending value produces a negative annualized rate; equal endpoints produce zero.
Years, months and the period convention
Select Years for decimal years or Months for a whole month count. Months are divided by 12 before the annual exponent is applied: 60 months becomes five annual periods, while 12 months becomes one. This is an accounting-period convention, not a calculation from calendar dates; exact start/end dates, day counts and leap years are outside this tool.
Formula and Excel RRI
Annual CAGR = (ending ÷ starting)^(1 ÷ years) − 1. The result keeps full-precision validated numbers for calculation and rounds only the primary percentage display. Microsoft's RRI function returns a rate per supplied period, so this page puts the year count in RRI's first argument. For example, 1,000 to 2,000 over 60 months uses =RRI(60/12,1000,2000), yielding approximately 0.148698354997 as a decimal cell, or 14.87% when formatted as a percentage. =RRI(60,1000,2000) would be per month, not annual CAGR. The copyable formula uses only your validated numbers, and Excel is not contacted by this page.
What CAGR does not show
One smoothed annual rate does not reveal actual intermediate values, changing annual returns, volatility, deposits or withdrawals. It is not an arithmetic average of annual returns and not a cash-flow-aware IRR or XIRR. It does not predict future performance or provide investment advice. If cash flows occurred during the period, use a method that includes their timing.
Frequently asked questions
What is the CAGR formula?
For positive starting and ending values in the same unit, annual CAGR is (ending value ÷ starting value)^(1 ÷ years) − 1. This gives one equivalent annual compounded rate between the two endpoints, not the actual return in each year.
How are months converted to an annual CAGR?
The calculator divides the entered whole-month count by 12, then uses that year count in the exponent. For example, 60 months equals five annual periods. It does not infer exact calendar dates or leap-day conventions.
Can CAGR be negative?
Yes. If the positive ending value is less than the positive starting value, the equivalent annual rate is negative. The result is an annualized decline between two endpoints, not a forecast or guaranteed loss.
How do I use the CAGR result in Excel?
Copy the RRI expression shown beside the result. Its first argument is a count of years, including a months ÷ 12 conversion when applicable. Excel returns a decimal rate; format that cell as a percentage. Microsoft's RRI documentation defines its arguments and per-period result.
Is CAGR an average annual return or the same as IRR?
No. CAGR smooths only a starting value, ending value and elapsed time into one equivalent compounded annual rate. An arithmetic average of yearly returns uses a different method, and IRR accounts for the timing of interim cash flows. This tool does not know deposits, withdrawals or the actual year-by-year path.
Does this calculator predict future investment performance?
No. It uses only the numbers you enter and does not fetch market data, model risk, forecast returns or recommend an investment.