Cagr Growth Calculator

CAGR Growth Calculator

The Compound Annual Growth Rate (CAGR) is a useful metric for understanding the average annual growth rate of an investment or any other value over a specified period longer than one year. It smooths out volatile returns and provides a more accurate picture of consistent growth than simple average growth.

What is CAGR?

CAGR represents the geometric mean of a series of annual growth rates. It's essentially the rate at which an investment would have grown if it had grown at the same rate every year over a specified period, assuming the profits were reinvested at the end of each year. It's widely used in finance, business, and economics to compare the performance of different investments or to analyze the growth of various metrics like revenue, users, or market share.

CAGR Formula

The formula for calculating CAGR is:

CAGR = (Ending Value / Beginning Value)^(1 / Number of Years) - 1

• Beginning Value: The initial value of the investment or metric.
• Ending Value: The final value of the investment or metric after the growth period.
• Number of Years: The duration of the investment or growth period in years.

How to Use This Calculator

To use the CAGR Growth Calculator, simply input the following values:

1. Beginning Value: Enter the starting value of your investment, revenue, or any other metric.
2. Ending Value: Enter the final value of that same metric after a period of growth.
3. Number of Years: Specify the total number of years over which the growth occurred.

Click "Calculate CAGR" to see the compound annual growth rate expressed as a percentage.

Examples of CAGR in Action

Let's look at a few practical examples:

• Investment Growth: If you invested $10,000 and it grew to $18,000 over 5 years, the CAGR would be approximately 12.47%. This means your investment grew at an average annual rate of 12.47% each year.
• Company Revenue: A company's revenue increased from $500,000 in 2018 to $1,200,000 in 2023 (a 5-year period). The CAGR for their revenue would be around 19.13%.
• Website Traffic: A website started with 10,000 unique visitors per month in 2020 and grew to 35,000 unique visitors per month by 2023 (a 3-year period). The CAGR for their traffic would be approximately 51.83%.

Beginning Value:

Ending Value:

Number of Years:

function calculateCAGR() { var beginningValue = parseFloat(document.getElementById('beginningValue').value); var endingValue = parseFloat(document.getElementById('endingValue').value); var numberOfYears = parseFloat(document.getElementById('numberOfYears').value); var resultDiv = document.getElementById('cagrResult'); if (isNaN(beginningValue) || isNaN(endingValue) || isNaN(numberOfYears) || beginningValue <= 0 || endingValue < 0 || numberOfYears 0) { resultDiv.innerHTML = 'CAGR cannot be calculated when Beginning Value is zero and Ending Value is positive (infinite growth).'; return; } if (beginningValue === 0 && endingValue === 0) { resultDiv.innerHTML = 'CAGR is undefined when both Beginning and Ending Values are zero.'; return; } var cagr = (Math.pow((endingValue / beginningValue), (1 / numberOfYears)) – 1) * 100; if (!isFinite(cagr)) { resultDiv.innerHTML = 'CAGR calculation resulted in an invalid number. Please check your inputs.'; return; } resultDiv.innerHTML = 'The Compound Annual Growth Rate (CAGR) is: ' + cagr.toFixed(2) + '%'; }

Understanding the Results

The CAGR value you receive is the annualized rate of return. A positive CAGR indicates growth, while a negative CAGR indicates a decline over the period. It's important to remember that CAGR is a hypothetical rate of return and does not reflect actual year-over-year fluctuations. It provides a smoothed average growth rate, which is excellent for comparing different investment opportunities or tracking consistent progress over time.

Use this calculator to quickly determine the CAGR for your financial planning, business analysis, or any other scenario where understanding average annual growth is crucial.