EZForecasting

Growth rate calculator (CAGR)

Turn "we went from $40,000 to $65,000" into a steady growth rate you can compare and plan with.

Reviewed October 2026

Growth rate calculator

What compound growth rate means

The compound growth rate is the steady rate that would take you from the starting value to the ending value if growth were the same every period. Measured per year, it's called the compound annual growth rate (CAGR):

Growth rate = (ending value ÷ starting value)^(1 ÷ number of periods) − 1

It smooths out the ups and downs between the two dates, which makes it useful for comparing products, years or businesses of different sizes. It also hides them: two businesses with the same CAGR can have had very different, and very differently risky, years in between.

Why not just divide the total change?

Because growth compounds. Going from 100 to 121 over two years is 21% in total, but it's 10% a year, not 10.5%: 100 grows 10% to 110, then 10% of 110 is 11 more.

Simple averaging overstates the steady rate, and the gap gets bigger the more periods there are and the faster you grow.

Picking the right start and end

  • Count periods between the values, not the number of values. January to December is 11 monthly steps.
  • Avoid unusual start or end points. Starting from a weak month or ending on a record one exaggerates growth. If you have the full history, the forecast tool uses every value, not just two.
  • Seasonal businesses should compare the same month or quarter across years.
  • It doesn't work across zero. A rate can't be calculated if the starting or ending value is zero or negative.

Sources