Try these example inputs in the CAGR calculator.
These figures match this guide's worked example. They are illustrative. They stay on this device and never appear in the URL.
CAGR — compound annual growth rate — is the constant yearly rate that takes a starting value to an ending value over a stretch of years. It answers "if this had grown at one steady rate, what would that rate have been?" It does not promise that the path was steady.
Key takeaways
CAGR = (ending value ÷ starting value) ^ (1 ÷ years) − 1
You need three numbers: a start greater than zero, an end that may be zero (a complete loss), and a holding period in years (decimals are fine — 2.5 years is two and a half). A negative ending value cannot be annualized this way.
Start with $10,000. Five years later it is $16,105.10.
Those are two readings of the same change. The 61% is what you made in total. The 10% is that result expressed as a smooth yearly rate — as if the account had grown 10% every year with no extra cash. Real years bounce around; CAGR ignores the bounce.
The arithmetic average of yearly returns is a different number. Start at $100. Year one ends at $150 (+50%). Year two ends at $135 (−10%). The two yearly returns average 20%. CAGR is √(135 ÷ 100) − 1, about 16.2%. The arithmetic mean is not a rate you can compound back to $135.
Deposits break CAGR in another way. If that $10,000 later received a $5,000 deposit, treating $16,105.10 as growth on the original $10,000 overstates the rate. Dated cash flows belong on XIRR.
The CAGR calculator also accepts optional start and end dates. Those dates use actual days ÷ 365, the same year fraction as this site's XIRR. Typed years still work when you leave the dates blank.
Try the same inputs in the CAGR calculator. It prints both numbers so they cannot be confused.
When the holding period is one year, CAGR and cumulative return match. That is a useful check, not a different formula.
It compresses a start value, an end value, and a span of years into one yearly rate so you can compare holding periods of different lengths. It describes a path that already happened.
CAGR does not know about money you added or took out. If you started with $10,000 and later deposited another $5,000, pretending the whole $16,105 grew from the original $10,000 overstates the rate. The honest tool for dated cash flows is a money-weighted return, usually called XIRR. Use the XIRR calculator when you have deposits or withdrawals, and read what XIRR is. Treat CAGR as a lump-sum statistic.
CAGR also says nothing about risk. Two paths can share a 10% CAGR — one a straight climb, one a crash and recovery. The single rate hides the ride.
A company page such as Apple shows how market cap has moved, with an as-of date. Those history figures are not a CAGR until you pick a start value, an end value, and a span of years. Type those yourself; the ranking will not invent them. For a sense of size rather than a growth rate, start with what market cap is.
CAGR is the geometric average of a lump-sum holding period, as used in CFA Institute equity valuation readings. Dated deposits and withdrawals are a money-weighted problem (XIRR), not this formula. The calculator implements the identity above; it is not a substitute for those texts.
Over a long stretch, what moves market cap is mostly price, plus slower changes in the share count. CAGR can summarize the value change. It cannot tell you why it happened.
For general education only. Nothing here is investment advice.
Formulas and worked examples are MarketCapLens's. See who checks the numbers.