CAGR Calculator
Free CAGR Calculator: put your start and end values and the number of years into =(End/Start)^(1/Years)-1, then format the cell as a percentage.
€10,000.00 → €19,672.00 over 10 years
Need it as an auditable file?
This calculation ships inside the Corporate Finance Suite — formula-driven, unlocked, audit-ready.
How it works
In Excel or Google Sheets, put your start and end values and the number of years into =(End/Start)^(1/Years)-1, then format the cell as a percentage.
Put the starting value, ending value and number of years in their own labelled cells.
In a blank cell type =(End/Start)^(1/Years)-1, clicking each cell where the names appear.
Press Enter, then format the result cell as a percentage with one or two decimals.
Drag the formula across columns to compare several investments side by side.
What this does
CAGR smooths a multi-year change into one annual rate — the constant rate that would carry the starting value to the ending value over the period. It strips out the noise of bumpy year-to-year swings so two investments over different horizons can be compared on equal footing. Because it is a geometric mean of growth, it is the honest way to summarise compounding, where a simple average would overstate the return.
A worked example
Say a fund grew from €10,000 to €19,672 over 10 years. Enter =(19672/10000)^(1/10)-1 and format as a percentage: the result is 7.0%. That single figure means the fund effectively earned 7% every year, compounded — even though the real path was lumpier. Change the ending value to €25,000 and the rate jumps to 9.6%, which is exactly what the live chart above redraws as you type. Reach for CAGR whenever you need to compare growth over different time spans or report a single, defensible annual figure to a board or client. It is the standard language of investment and revenue reporting precisely because it is comparable and hard to game.
Common mistakes
- Using a simple average of yearly returns — it overstates compounded growth; CAGR is the geometric rate.
- Counting the wrong number of years (use elapsed years, not the count of data points).
- Feeding a zero or negative starting value, which makes the ratio meaningless.
- Leaving the cell as a raw decimal (0.07) instead of formatting it as 7%.
FAQ
What is a good CAGR?
It depends on the asset class: broad equity indices have historically returned roughly 7–10% nominal CAGR, but the right benchmark is whatever a comparable, equally risky alternative would return.
Does CAGR account for volatility?
No. It describes the smoothed end-to-end rate and deliberately ignores the path, so two very different risk profiles can share the same CAGR. Pair it with standard deviation to see the risk.
Can CAGR be negative?
Yes — if the ending value is below the starting value the rate is negative, telling you the position lost an average of that much each year.
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