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Growth Rate Calculator

📅Last updated: December 3, 2025
✓Reviewed by: LumoCalculator Team

Calculate CAGR (Compound Annual Growth Rate), simple growth rate, average growth, future value projections, and time to reach targets. Essential for investment analysis and financial planning.

Growth Rate Calculator

Calculate CAGR, projections & more

Years, months, or any time unit

Calculation Results

CAGR (Compound Annual)
+8.45%
Total Change
+500
Multiplier
1.50×
Doubling Time
8.5 periods
Initial Value:1,000
Final Value:1,500
Periods:5
💡 Explanation

The Compound Annual Growth Rate (CAGR) over 5 periods is 8.45%. This means on average, the value grew 8.45% per period compounded. At this rate, the value would double in approximately 8.5 periods.

Formula Used

(Final/Initial)^(1/n) - 1
(1,500/1,000)^(1/5) - 1 = 8.4472 = 8.45%

All Growth Rates

Simple Growth+50.00%
CAGR+8.45%
Average Rate+10.00%

Related Calculators

Understanding Growth Rate Types

📊 Simple Growth Rate
((Final - Initial) / Initial) × 100
  • • Total percentage change
  • • Doesn't account for time
  • • Good for single-period analysis
📈 CAGR
(Final/Initial)^(1/n) - 1
  • • Compound Annual Growth Rate
  • • Smooths out volatility
  • • Standard for multi-year analysis
➗ Average Growth Rate
Total Growth / Periods
  • • Arithmetic mean
  • • Simpler calculation
  • • Less accurate for compounding
🎯 Future Value
PV × (1 + r)^n
  • • Project future values
  • • Compound growth formula
  • • Key for financial planning

Doubling Time Reference (Rule of 72)

Growth RateRule of 72Exact Time
1%72 years69.66 years
2%36 years35.00 years
3%24 years23.45 years
5%14.4 years14.21 years
7%10.3 years10.24 years
10%7.2 years7.27 years
12%6 years6.12 years
15%4.8 years4.96 years
20%3.6 years3.80 years
25%2.9 years3.11 years

* Rule of 72: Doubling Time ≈ 72 ÷ Growth Rate. Most accurate for rates between 6-10%.

Typical Growth Rates

US Historical Stock Market (S&P 500)~10%

Long-term average annual return

US GDP Growth2-3%

Typical developed economy

Emerging Market GDP5-7%

Fast-growing economies

US Inflation Target2%

Federal Reserve target

World Population~1%

Current annual growth

High-Growth Startup Revenue100%+

Year-over-year growth

CAGR vs Average Growth Rate

Why They Differ

Consider $1,000 that grows 50% year 1, then loses 33% year 2:

  • • Year 0: $1,000
  • • Year 1: $1,500 (+50%)
  • • Year 2: $1,000 (-33%)
Average: (50% + (-33%)) / 2 = 8.5%
CAGR: ($1,000/$1,000)^(1/2) - 1 = 0%

When to Use Each

Use CAGR when:
  • • Comparing investment performance
  • • Long-term growth analysis
  • • You care about end results
Use Average when:
  • • Analyzing year-by-year trends
  • • Non-compounding scenarios
  • • Simple forecasting

Common Applications

💰 Investment Analysis
  • • Portfolio performance tracking
  • • Fund comparison
  • • Return on investment (ROI)
🏢 Business Growth
  • • Revenue growth tracking
  • • Market share analysis
  • • User/customer growth
📊 Economic Indicators
  • • GDP growth rate
  • • Inflation rate
  • • Population growth
🎯 Financial Planning
  • • Retirement projections
  • • Savings goals
  • • Education fund planning

Frequently Asked Questions

What is CAGR (Compound Annual Growth Rate)?
CAGR is the mean annual growth rate of an investment over a specified time period longer than one year. It represents the rate at which an investment would have grown if it had grown at a steady rate. Formula: CAGR = (Ending Value / Beginning Value)^(1/n) - 1, where n is the number of years.
What is the difference between simple growth rate and CAGR?
Simple growth rate measures total change: ((Final - Initial) / Initial) × 100. It doesn't account for time. CAGR annualizes the growth, showing what the annual growth rate would be if growth were constant each year. For example, 50% total growth over 5 years equals ~8.45% CAGR, not 10% (50÷5).
How do I calculate doubling time?
The Rule of 72 provides a quick estimate: Doubling Time ≈ 72 / Growth Rate (%). For example, at 10% growth, doubling time ≈ 72/10 = 7.2 years. The exact formula is: Doubling Time = ln(2) / ln(1 + r), where r is the growth rate as a decimal.
How do I project future value with a growth rate?
Use the compound growth formula: Future Value = Present Value × (1 + r)^n, where r is the growth rate (as a decimal) and n is the number of periods. For example, $1,000 growing at 10% for 5 years: $1,000 × (1.10)^5 = $1,610.51.
What is a good growth rate for investments?
It depends on the asset class and risk tolerance. Historical averages: S&P 500 stocks ~10% annually, bonds ~5-6%, real estate ~3-4%, savings accounts ~0.5-2%. Inflation averages ~2-3%, so "real" (inflation-adjusted) returns are lower. Higher growth usually means higher risk.
How do I calculate time needed to reach a target?
Use the formula: n = ln(Target/Initial) / ln(1 + r), where r is the growth rate. For example, to double $1,000 to $2,000 at 8% annual growth: n = ln(2000/1000) / ln(1.08) = ln(2) / ln(1.08) ≈ 9 years.