Calculate Compound Annual Growth Rate (CAGR) for investments, revenue, or any metric. Includes reverse CAGR and future value projection.
CAGR Calculator
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What is CAGR and How to Calculate It
CAGR (Compound Annual Growth Rate) is the rate at which an investment or metric would have grown if it grew at a steady annual rate. It smooths out year-to-year volatility to give a single representative growth rate over a period.
CAGR Formula
CAGR = (Ending Value / Beginning Value)^(1/Years) − 1
Example: Revenue grew from $500,000 to $1,200,000 over 6 years. CAGR = (1,200,000/500,000)^(1/6) − 1 = 2.4^0.1667 − 1 = 15.7%
CAGR vs Average Annual Return
CAGR and average annual return are different. If an investment gained 100% one year and lost 50% the next, the average return is 25% but the CAGR is 0% (you're back to where you started). CAGR reflects the actual compounded reality; arithmetic average overstates it when there's volatility.
Benchmark CAGRs to Know
S&P 500 historical CAGR: ~10% (7% after inflation)
Good SaaS company CAGR: 30–50%+
Real estate (US): ~4–6% CAGR historically
Bitcoin 5-year CAGR (2019–2024): ~50%+
Frequently Asked Questions
It depends on the stage and industry. Startups aiming for venture investment typically need 3x growth in 3 years (that's ~44% CAGR). Mature public companies with 15-20% CAGR are considered high-growth. For personal investments, matching or beating the S&P 500's ~10% CAGR is a reasonable benchmark.
CAGR measures growth from a single beginning to ending value over time. IRR (Internal Rate of Return) accounts for multiple cash flows at different times (like regular dividend payments or periodic investments). For a simple buy-and-hold investment with no interim cash flows, CAGR and IRR are identical. For complex cash flows, use IRR.
Yes — if the ending value is lower than the beginning value, CAGR is negative. A portfolio that went from $100,000 to $70,000 over 5 years has a CAGR of (70,000/100,000)^(1/5) − 1 = −6.9% per year. Negative CAGR represents annualized decline.
Revenue CAGR is one of the most commonly cited metrics in startup pitches and business sales. A 5-year revenue CAGR of 40%+ attracts high valuation multiples (10x+ ARR) while a 10% CAGR typically commands lower multiples. CAGR over 3 years is most reliable; single-year growth rates can be misleading due to base effects.