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Calculators · ~2 min

CAGR calculator

“What is my compound annual growth rate?”

Turn a starting value, an ending value and a number of years into one comparable yearly growth rate.

growth rate

CAGR

20.11%

Total (absolute) growth

150.0%

Growing at a steady 20.11% a year turns ₹10,00,000 into ₹25,00,000 in 5 years.

the guide

CAGR: the compound annual growth rate explained

By Shivam Bhandari · Reviewed 31 October 2026 · How we write

CAGR, or compound annual growth rate, is the steady yearly growth rate that would take a value from its starting point to its ending point over a number of years.

It is useful because real growth is uneven. A business might grow 40% one year and 5% the next; CAGR smooths this into one comparable number for revenue, profit, investments or market size.

the formula

CAGR = (Ending value ÷ Starting value)^(1 ÷ Years) − 1

  • · Multiply by 100 to express it as a percentage.
  • · Absolute growth = (End − Start) ÷ Start, which ignores time.

Worked example: revenue growth

  • Revenue grew from ₹10 lakh to ₹25 lakh over 5 years.
  • CAGR = (25 ÷ 10)^(1/5) − 1 ≈ 20.11% a year.
  • Absolute growth is 150%, but CAGR shows what that means each year.

Tips

  1. 1Use CAGR to compare growth across businesses or investments over different periods.
  2. 2Remember CAGR hides volatility — check year-by-year numbers too.
  3. 3Be careful with very short periods, which can exaggerate CAGR.
  4. 4Use consistent start and end points (for example, financial years).

Frequently asked questions

What is CAGR?

The compound annual growth rate — the constant yearly rate that would grow a starting value to an ending value over a given number of years.

How is CAGR different from average growth?

Average growth adds yearly growth rates and divides; CAGR accounts for compounding and gives the true steady rate.

Can CAGR be negative?

Yes — if the ending value is lower than the starting value, CAGR is negative.

What is a good CAGR for a business?

It depends on industry, size and stage. Compare with competitors and your own targets rather than a single benchmark.