📊 Compound Growth Calculator
Calculate compound annual growth rate (CAGR) for any value over time
How to Use This Calculator
Enter Initial Value
Input the starting value (e.g., $10,000 for an investment, $100,000 for revenue).
Enter Final Value
Input the ending value (e.g., $20,000 for an investment, $200,000 for revenue).
Enter Time Period
Enter the time period and select the unit (years, months, or days).
View Results
See your compound annual growth rate (CAGR) and total growth percentage.
Formula
CAGR = ((Final Value / Initial Value)(1/Years)) - 1
Where: Years = Time Period converted to years
Example Calculation:
If revenue grew from $100,000 to $200,000 over 5 years:
Step 1: Calculate growth ratio
Growth Ratio = $200,000 / $100,000 = 2.0
Step 2: Calculate CAGR
CAGR = (2.0(1/5)) - 1
CAGR = (2.00.2) - 1
CAGR = 1.1487 - 1 = 0.1487 = 14.87%
About Compound Growth Calculator
The compound growth calculator helps you determine the compound annual growth rate (CAGR) for any value that changes over time. CAGR is the average annual growth rate over a period, assuming that growth compounds. It's widely used in finance and business to measure investment returns, revenue growth, population growth, and any metric that changes over time. CAGR smooths out volatility and provides a single annual growth rate that represents the average performance.
When to Use This Calculator
- Investment Analysis: Calculate the compound growth rate of investments over time
- Business Performance: Measure revenue, profit, or customer growth rates
- Portfolio Analysis: Evaluate the compound growth of investment portfolios
- Financial Planning: Project future values based on historical compound growth
- Comparison: Compare growth rates across different investments or time periods
Why Use Our Calculator?
- ✅ Accurate CAGR: Calculates compound annual growth rate precisely
- ✅ Flexible Time Periods: Supports years, months, and days
- ✅ Complete Analysis: Shows CAGR, total growth, and growth ratio
- ✅ 100% Free: No registration or payment required
- ✅ Mobile Friendly: Works seamlessly on all devices
- ✅ Universal Application: Works for investments, revenue, population, or any metric
Common Applications
Investment Returns: Calculate how your investment portfolio has grown over time. For example, if $10,000 grew to $20,000 over 7 years, the CAGR is 10.41%, which helps you compare with other investment options.
Business Revenue Growth: Track your company's revenue growth rate. A business that grew from $1 million to $2.5 million over 5 years has a CAGR of 20.11%, showing strong growth performance.
Stock Performance: Evaluate stock price growth over time. A stock that went from $50 to $100 over 3 years has a CAGR of 26.0%, which you can compare with market indices or other stocks.
Population Growth: Calculate population growth rates for planning purposes. A city that grew from 100,000 to 150,000 over 10 years has a CAGR of 4.14%.
Tips for Best Results
- Use actual initial and final values for accurate calculations
- CAGR assumes steady growth, which may not reflect actual year-to-year volatility
- Compare CAGR only for investments or metrics with similar risk profiles
- Remember that CAGR doesn't account for cash flows during the period
- For investments with multiple cash flows, consider using IRR instead
Frequently Asked Questions
What is compound growth rate (CAGR)?
CAGR (Compound Annual Growth Rate) is the average annual growth rate over a period, assuming that growth compounds. It provides a smoothed annual growth rate that represents the average performance, making it easier to compare different investments or metrics over different time periods.
How is CAGR different from average growth rate?
Simple average growth rate divides total growth by the number of years. CAGR accounts for compounding, meaning it assumes growth builds on previous growth. CAGR is more accurate for comparing investments because it reflects the compounding effect.
Can CAGR be negative?
Yes, if the final value is less than the initial value, CAGR will be negative, representing an average annual loss. For example, if an investment goes from $10,000 to $7,000 over 3 years, the CAGR is -11.19%.
Does CAGR account for volatility?
No, CAGR smooths out volatility and provides a single average growth rate. It doesn't show year-to-year fluctuations. An investment with volatile returns might have the same CAGR as one with steady returns, but very different risk profiles.
Why is CAGR useful?
CAGR is useful because it provides a single number that represents average annual growth, making it easy to compare investments or metrics with different time periods. It's widely used in finance, business, and economics for performance measurement and comparison.