Enter revenue, population, or portfolio value at the start.
Enter the value exactly 3 years later.
Compound Annual Growth Rate (CAGR):
Total Percentage Growth (3 Years):
Absolute Value Change:
function calculateGrowthRate() {
var startValInput = document.getElementById('initialValue').value;
var endValInput = document.getElementById('finalValue').value;
var errorDiv = document.getElementById('errorMessage');
var resultsDiv = document.getElementById('resultsArea');
// Hide previous results and errors
errorDiv.style.display = 'none';
resultsDiv.style.display = 'none';
// Convert to numbers
var startVal = parseFloat(startValInput);
var endVal = parseFloat(endValInput);
var years = 3; // Fixed for this specific calculator context
// Validation
if (isNaN(startVal) || isNaN(endVal)) {
errorDiv.textContent = "Please enter valid numeric values for both fields.";
errorDiv.style.display = 'block';
return;
}
if (startVal === 0) {
errorDiv.textContent = "Starting value cannot be zero for growth rate calculations.";
errorDiv.style.display = 'block';
return;
}
if (startVal 0) {
errorDiv.textContent = "Calculating CAGR with a negative starting value and positive ending value is not mathematically standard.";
errorDiv.style.display = 'block';
return;
}
// Logic
// 1. Absolute Change
var absoluteChange = endVal – startVal;
// 2. Total Growth Percentage
var totalGrowthPercent = (absoluteChange / startVal) * 100;
// 3. CAGR (Compound Annual Growth Rate) for 3 years
// Formula: ( (End / Start) ^ (1/3) ) – 1
var ratio = endVal / startVal;
var cagrDecimal;
// Handle negative base for power function issues
if (ratio < 0) {
// If ratio is negative (e.g. positive start to negative end), standard CAGR formula returns NaN or imaginary numbers.
// We will handle it by just showing the total decline, but CAGR is strictly undefined in real numbers for negative ratios in even roots, though odd roots (1/3) are technically possible.
// JS Math.pow allows negative base with fractional exponent ONLY if the denominator is odd. 3 is odd, so Math.pow works.
cagrDecimal = (Math.sign(ratio) * Math.pow(Math.abs(ratio), (1/years))) – 1;
} else {
cagrDecimal = Math.pow(ratio, (1/years)) – 1;
}
var cagrPercent = cagrDecimal * 100;
// Display Results
document.getElementById('resultCAGR').textContent = cagrPercent.toFixed(2) + "%";
document.getElementById('resultTotalPercent').textContent = totalGrowthPercent.toFixed(2) + "%";
document.getElementById('resultAbsolute').textContent = absoluteChange.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsDiv.style.display = 'block';
}
function resetCalculator() {
document.getElementById('initialValue').value = '';
document.getElementById('finalValue').value = '';
document.getElementById('errorMessage').style.display = 'none';
document.getElementById('resultsArea').style.display = 'none';
}
How to Calculate 3-Year Growth Rate
Calculating the growth rate over a three-year period is a fundamental analysis technique used in business finance, investment tracking, and economic studies. While calculating simple growth tells you how much a value increased in total, calculating the 3-Year Compound Annual Growth Rate (CAGR) provides a smoothed annual average, making it easier to compare performance against other assets or benchmarks.
This calculator determines three key metrics:
CAGR: The average yearly growth rate required to go from the starting value to the ending value over three years.
Total Percentage Growth: The total percent change from Year 0 to Year 3.
Absolute Change: The numeric difference between the ending and starting values.
The 3-Year Growth Rate Formulas
To understand the numbers behind the calculator, it is helpful to review the mathematical formulas used.
1. Compound Annual Growth Rate (CAGR) Formula
The CAGR formula assumes that the investment or metric grew at a steady rate, compounded annually.
CAGR = ( Ending Value / Beginning Value )1/3 – 1
Note: The exponent "1/3" represents the inverse of the number of years (n=3).
2. Total Growth Percentage Formula
This measures the aggregate growth without accounting for compounding over time.
Total Growth % = ( (Ending Value – Beginning Value) / Beginning Value ) × 100
Example Calculation
Let's say you are analyzing a company's revenue growth over a 3-year strategic cycle:
Starting Revenue (Year 0): $100,000
Ending Revenue (Year 3): $150,000
Step 1: Calculate the Ratio
150,000 / 100,000 = 1.5
Step 2: Apply the Exponent (Cube Root)
1.5(1/3) ≈ 1.1447
Step 3: Subtract 1 and Convert to Percent
1.1447 – 1 = 0.1447
0.1447 × 100 = 14.47%
This means the company grew at an average annualized rate of 14.47% over the three years.
Why Use a 3-Year Period?
A 3-year horizon is often preferred in financial analysis because:
Volatility Smoothing: One year of data can be an anomaly due to seasonal factors or one-off events. Three years provides a trend.
Strategic Planning: Many corporate strategies are executed in 3-year cycles (short enough to be actionable, long enough to see results).
Investment Analysis: Mutual funds and ETFs are commonly graded on their 3-year annualized returns.