Growth Rate Calculator

Starting Value

Ending Value

Number of Periods (optional)

Growth Rate

74.00%

CAGR (if periods given)

20.28%

74.00% total growth over 3.00 periods is a compound annual rate of 20.28%.

Formulas

Growth Rate = ((End − Start) ÷ Start) × 100 · CAGR = ((End ÷ Start)^(1 ÷ Periods) − 1) × 100

Growth rate measures how much a value increased between two points, either as a single simple percentage or, when a number of periods is provided, as a compound annual growth rate (CAGR), the steady per-period rate that would produce the same overall result.

CAGR is the figure investors, analysts, and founders reach for whenever a total return needs to be compared across different time spans, a two-year and a five-year investment can't be compared fairly on total growth alone, but their CAGRs sit on the same annualized footing.

Growth Rate and CAGR Formulas

Simple growth rate

Growth Rate = ((End − Start) ÷ Start) × 100

Compound annual growth rate (CAGR)

CAGR = ((End ÷ Start)^{1 ÷ Periods} − 1) × 100

Leave the periods field blank for just the simple rate, CAGR only appears once a number of periods is provided, since compounding requires knowing how many steps the growth was spread across.

How to Calculate CAGR

Find the simple growth rate first
Divide the ending value by the starting value
Raise that ratio to the power of 1 divided by the number of periods
Subtract 1 and multiply by 100

Growth Rate Examples

Example 1, App user base, 45,000 to 78,300 over 3 years

+74.00% total, 20.28% CAGR

Simple growth rate (78,300 − 45,000) ÷ 45,000 × 100 = 74.00%
Ratio for CAGR 78,300 ÷ 45,000 = 1.74
Apply the exponent 1.74^(1 ÷ 3) = 1.2028
Convert to a rate (1.2028 − 1) × 100 = 20.28%

A user base that grew 74% total over 3 years grew at a compound annual rate of about 20.28%, the steady yearly pace that produces the same 3-year result.

Example 2, Investment account, $8,000 to $10,800, no period specified

+35.00%

Simple growth rate (10,800 − 8,000) ÷ 8,000 × 100 = 35.00%
CAGR Not shown, no number of periods was provided

Without a number of periods, only the simple total growth rate can be computed, 35% over however long the account actually took to grow.

Relationship to Percentage Decrease

Growth rate is percentage increase read over time, and its sign can flip to describe a decline exactly the way percentage decrease does, a negative growth rate and CAGR both mean the ending value is lower than where it started, computed with the same underlying formula shape.

Where Growth Rate Shows Up

Startup User Growth

Founders and investors track user or customer base growth rate to gauge traction, often annualized into a CAGR for board reporting.

Investment Portfolio Performance

CAGR lets investors compare two holdings with different time horizons on the same annualized basis.

Multi-Year Business Planning

Business plans use a target CAGR to set realistic multi-year revenue or headcount goals rather than an arbitrary single total figure.

Frequently Asked Questions

Questions specific to CAGR and multi-period growth, which is where most confusion with simple growth rates tends to start, particularly when comparing investments held for different lengths of time.

What's the difference between growth rate and CAGR?

Simple growth rate compares only the start and end values, ignoring how long it took. CAGR spreads that same total growth evenly across the number of periods, answering "what steady rate per period produces this result."

Why is CAGR always lower than the total simple growth rate whenever more than one period is involved?

Because CAGR compounds, each period's growth is calculated on the already-grown value from the previous period, so a smaller per-period rate, applied repeatedly, still adds up to the same large total.

Can growth rate be negative?

Yes, a negative growth rate means the ending value is smaller than the starting value, which is the same calculation as a percentage decrease read from the growth side.

How many periods should I use for a meaningful CAGR?

At least two, and ideally enough to smooth over short-term noise, a CAGR calculated over a single volatile year can be misleading compared to one calculated over three to five years.

Is CAGR the same as the average of each year's individual growth rate?

No, and this is a common mistake. CAGR is a compound (multiplicative) average, not a simple arithmetic average of yearly rates: a year of +50% followed by a year of −50% averages to 0% arithmetically, but the actual CAGR is negative, since the value never fully recovers.

How do I calculate a growth rate for irregular time periods?

Convert the irregular span into a fractional number of periods, 18 months is 1.5 years, and use that fractional value in the periods field to get an accurate annualized rate.

What does a CAGR of 0% mean?

The ending value equals the starting value, no net growth over the entire span, even if the value fluctuated up and down in between.

How is CAGR used to compare two different investments?

It reduces two investments with different time horizons and different total returns to the same comparable measure, an annual rate, making it possible to say which one performed better per year rather than just which one made more money in total.

Can I use months instead of years for the periods field?

Yes, the calculation doesn't care what unit the periods represent, as long as you're consistent; using months instead of years simply produces a compound monthly growth rate instead of an annual one.

Why does a high simple growth rate sometimes correspond to an unimpressive CAGR?

Because the same total growth spread over many periods implies a much smaller rate per period, 74% total growth over three periods is only about 20% per period, which is respectable but far less dramatic-sounding than "74% growth."