Growth Rate Calculator
Calculate the Compound Annual Growth Rate (CAGR) for your investments or business metrics.
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Growth Rate (CAGR) per Period
0%
The constant rate at which a value would have grown each period.
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Total Growth
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Future Value (in 5 periods)
Growth Projection
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What is Growth Rate (CAGR)?
The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment or metric over a specified period of time longer than one year. It represents the smooth, constant rate at which the value would need to grow each year to get from the past value to the present value.
CAGR is one of the most accurate ways to measure growth because it accounts for the effects of compounding. It's an essential tool for investors to compare the performance of different assets and for businesses to evaluate the long-term growth of revenue, users, or other key metrics.
How to Calculate Growth Rate
The 3 Simple Steps
Follow this simple three-step formula to calculate the Compound Annual Growth Rate (CAGR).
Divide Values
Divide the Present (ending) Value by the Past (starting) Value.
Raise to an Exponent
Raise the result to the power of 1 divided by the Number of Periods.
Subtract One
Finally, subtract one from the result to find the growth rate (multiply by 100 for percentage).
The Growth Rate Formula
The formula to calculate the Compound Annual Growth Rate (CAGR) is a bit more complex than a simple percentage increase, as it accounts for compounding over multiple periods.
Where 'N' is the number of periods (e.g., years). The result is the average rate of growth if the value had grown at a steady rate.
Why is Calculating Growth Rate Important?
Calculating the growth rate (CAGR) provides a smoothed-out, average perspective on performance. It's invaluable for comparing different investments with varying levels of volatility, forecasting future values based on historical trends, and setting realistic, data-backed business objectives.
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Frequently Asked Questions
A simple average just adds up the growth rate for each year and divides by the number of years. CAGR is a geometric average that provides a more accurate picture by accounting for compounding. An investment with volatile returns will have a lower CAGR than a simple average, reflecting its true performance.
Yes. If the present value is lower than the past value, the calculator will show a negative CAGR, which represents the annual rate of decline over the period.
This is the total number of time intervals over which the growth occurred. If you are measuring growth from the start of 2020 to the start of 2025, that is 5 years, so you would enter 5. It can also be months, quarters, or any other consistent time unit.
CAGR is most useful for time periods of three to five years. Shorter periods can be misleading, and longer periods can hide sub-trends. It's ideal for comparing the historical performance of different investments, like mutual funds or stocks, or for tracking the growth of business metrics like revenue.
No, this is a simple CAGR calculator. It assumes the growth is based solely on the starting and ending values over the time period. It does not factor in deposits or withdrawals made during the period.
Not necessarily. A high growth rate can be associated with high volatility and risk. CAGR is a historical measure and does not guarantee future results. It's important to consider the growth rate in the context of the investment's risk and your overall financial goals.
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See how our users leverage the Growth Rate Calculator.
Anya Sharma
Financial Analyst
"Finally, an easy-to-use CAGR calculator. The projection chart is fantastic for visualizing future returns for my clients."
Marco Rossi
Startup Founder
"I use this to track our user growth for investor meetings. The downloadable report looks incredibly professional. Highly recommend."
Chloe Dubois
Retail Manager
"Great for checking year-over-year sales figures. Simple, clean, and gives me the numbers I need to see."
David Chen
Personal Investor
"Excellent for comparing my different stocks. Calculating the CAGR for each helps me understand their true performance over time."
Fatima Al-Jamil
Real Estate Agent
"Super helpful for showing clients the historical growth rate of property values in a neighborhood. The chart makes it easy to understand."
Leo Virtanen
MBA Student
"This calculator was a lifesaver for my corporate finance class. It made understanding CAGR so much easier."
Isabella Sousa
Marketing Strategist
"I use this to show our clients their social media follower growth rate. The visual projection chart is a huge plus."
Omar Hassan
Economics Teacher
"An excellent teaching aid for demonstrating compound growth to my students. The charts make an abstract concept very tangible."
Sofia Nowak
Non-Profit Coordinator
"We use this for our annual reports to track donor growth. It's simple, accurate, and the downloadable image is perfect for our presentations."
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