Free tool CAGR calculator and CAGR formula
CAGR is the steady yearly growth rate that would take a value from where it started to where it ended. Enter revenue, users or any other figure at two points in time and the number of years between them.
- Compound, not simple average
- Updates as you type
- Runs locally
Enter the start, the end and the years
Both values must be above zero and in the same unit. Years can include a fraction: 18 months is 1.5.
The value at the beginning of the period, such as revenue in the first year.
The value at the end of the period, in the same unit.
Years between the two values, not the number of years listed. 2022 to 2025 is 3.
CAGR (compound annual growth rate)
+20.5%
The constant yearly rate that turns the starting value into the ending value.
Share these inputs: the values go after the # in the link, so they never reach a server.
https://tapcub.com/tools/cagr-calculator
Version v1.0Updated Update history
What the three numbers say
CAGR compresses several years into one rate. That makes periods and companies easy to compare, and it also hides everything that happened in between.
CAGR
If the value had grown by exactly this rate every year, it would have reached the ending value. In the example, $2.0M growing 20.5% a year for 3 years becomes $3.5M.
Total multiple
How many times larger the ending value is. 1.75× means the value grew 75% over the whole period, not per year.
Years to double
How long the same rate would take to double the value. At 20.5% a year that is 3.7 years. It is a projection of the past rate, not a forecast.
A smoothed line, not the real path
Two businesses with the same CAGR can have very different years. One grew steadily; the other was flat and then jumped. Look at the yearly figures as well.
CAGR cannot be calculated when the starting value is zero or negative, or when the ending value is zero. For those cases, report the yearly figures instead.
Three steps to a fair CAGR
The arithmetic takes a second. Choosing the inputs is where a CAGR becomes honest or flattering.
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1
Pick the two endpoints
Use the same measure at both ends: full-year revenue against full-year revenue, or year-end customers against year-end customers.
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2
Count the intervals
Years is the gap between the two points. Revenue for 2022 and for 2025 is 3 years apart, even though four years are named.
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3
Check the path
Put the CAGR next to the year-by-year growth. If one year carries most of the change, say so rather than quoting the average.
CAGR = (end ÷ start)^(1 ÷ years) − 1
Dividing the ending value by the starting value gives the total multiple. Taking the n-th root spreads that multiple evenly over n years, and subtracting 1 turns it into a rate.
- Use the same unit and the same definition for both values
- Years can be fractional: 30 months is 2.5 years
- The simple average of yearly rates is usually higher than CAGR, because it ignores compounding
- The rule of 72 (72 ÷ rate) approximates the doubling time; the calculator uses the exact formula
CAGR
CAGR = (end ÷ start)^(1 ÷ years) − 1
($3,500,000 ÷ $2,000,000)^(1 ÷ 3) − 1 = 1.75^(1/3) − 1 = +20.5%
Total multiple
multiple = end ÷ start
$3,500,000 ÷ $2,000,000 = 1.75×
Years to double
years = ln 2 ÷ ln(1 + CAGR)
ln 2 ÷ ln 1.205 = 3.7 years (rule of 72: 72 ÷ 20.5 ≈ 3.5)
Simple average, for comparison
average = (end ÷ start − 1) ÷ years
75% ÷ 3 = 25% a year, which overstates the compound rate
Same CAGR, two very different businesses
Both product lines went from $2.0M to $3.5M in three years, so both have a CAGR of 20.5%. Only the yearly figures show that one of them stalled for two years.
| Year | Steady line | Growth | Lumpy line | Growth |
|---|---|---|---|---|
| Start | $2.00M | — | $2.00M | — |
| Year 1 | $2.41M | +20.5% | $2.05M | +2.5% |
| Year 2 | $2.90M | +20.5% | $2.10M | +2.4% |
| Year 3 | $3.50M | +20.5% | $3.50M | +66.7% |
| CAGR | +20.5% | +20.5% |
The lumpy line grew about 2.5% a year for two years, then jumped 66.7% in one. Quoting "20.5% CAGR" for it is accurate and misleading at the same time. Sample figures.
Where CAGR figures go wrong
Most bad CAGRs come from the inputs, not the formula.
Counting years, not gaps
2022 to 2025 is 3 years of growth. Entering 4 turns 20.5% into 15.0% for the same two figures.
Reading it as yearly growth
CAGR is a smoothed rate. The business may never have grown by that amount in any single year.
Choosing flattering endpoints
Starting from a bad year inflates CAGR; ending on a peak does the same. State the period and why it was chosen.
Averaging the yearly rates
+50% then −50% averages to 0%, but $100 becomes $75. Compound growth needs the geometric rate, which is what CAGR gives.
The yearly path behind the rate
CAGR needs two numbers you trust. TapCub keeps revenue, retention and activation on one board, so the figures you put into the calculator come from the same definitions every period.
CAGR questions
Still have a question?
Chat with the team behind TapCub — we usually reply within a few hours on business days.
What is CAGR, and what is the CAGR formula?
CAGR (compound annual growth rate) is the constant yearly rate at which a value would have to grow to go from its starting value to its ending value. The formula is CAGR = (end ÷ start)^(1 ÷ years) − 1. It is used for revenue, users, customers, market size and investment returns.
How do I calculate CAGR?
Divide the ending value by the starting value, raise the result to the power of 1 ÷ years, then subtract 1. From $2,000,000 to $3,500,000 over 3 years: 1.75^(1/3) − 1 = 20.5% a year. In Excel or Google Sheets: =(end/start)^(1/years)-1, or RRI(years, start, end).
What is the difference between CAGR and average annual growth?
The average annual growth rate is the arithmetic mean of each year’s rate; CAGR is the geometric rate that accounts for compounding. Total growth of 75% over 3 years is a 25% simple average but a 20.5% CAGR. CAGR is the one that reproduces the ending value.
Can I calculate CAGR for months or a partial year?
Yes. Enter years as a decimal: 18 months is 1.5, 30 months is 2.5. If you want a monthly compound rate instead, the growth rate calculator takes any number of periods.
Can CAGR be negative?
Yes, when the ending value is lower than the starting value. $5,000,000 down to $3,000,000 over 2 years is a CAGR of −22.5%. The calculator does not show a doubling time for negative rates.
What is a good CAGR?
There is no single benchmark. It depends on the size of the business, the market and the period. Compare against your own earlier periods and against the growth of the market you sell into, measured over the same years.
How does the rule of 72 relate to CAGR?
Dividing 72 by the growth rate in percent gives a quick estimate of the years needed to double. At 20.5% that is about 3.5 years; the exact figure, ln 2 ÷ ln 1.205, is 3.7. The rule is close at single-digit rates and drifts at higher ones.
Update history
New features, fixes and data refreshes for this tool, newest first.
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· v1.0
LaunchedFirst release.
Missing something or found an error? Tell us — requests that come up often go into the next update. All tool updates
Track the growth, not just the endpoints
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