Annual Growth Rate Calculator

This calculator converts a starting value and an ending value over a fixed span of years into the compound annual growth rate (CAGR), which answers the question, "What average percentage did the quantity grow each year?" It is ideal for evaluating business revenue increases, portfolio expansions, or population shifts across multi-year periods.

How the Annual Growth Rate Works

The annual growth rate assumes consistent compounding. It takes the ratio of the final amount to the initial amount, raises that ratio to the power of 1 divided by the number of years, and subtracts 1. The result represents the steady pace of growth per year.

For example, if a research fund grows from $350,000 to $620,000 in four years, the annual growth rate answers how much that investment increased on average each year, even if the actual quarterly numbers bounced around.

Example

A small manufacturing business increases production income from $1,200,000 to $2,050,000 over five years. Feeding those values into this calculator yields the average yearly growth rate that smooths out seasonal fluctuations and one-off spikes, giving a reliable benchmark for planning future capacity.