Compound Monthly Growth Rate Calculator
Multiplying by twelve always understates.
Compound monthly growth
4.1%
61.9% annualised
Multiplying the monthly rate by twelve gives 49.2%; compounding gives 61.9%. The gap widens with the rate, and it is the most common arithmetic error in growth reporting — always in the direction of understating.
How the Compound Monthly Growth Rate Calculator works
Multiplying a monthly rate by twelve to annualise it is the most common arithmetic error in growth reporting, and it always understates. A 6% monthly rate is not 72% a year — it is 101%.
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Frequently asked questions
How is CMGR calculated?
Latest month divided by first month, raised to one over the number of months between them, minus one. It smooths month-to-month noise into a comparable rate.
How do I annualise it correctly?
Raise one plus the monthly rate to the twelfth power and subtract one. At 6% monthly that gives 101%, not 72%.
What is a good CMGR?
For early-stage businesses, 10% to 20% monthly is often cited as strong. Sustaining anything above a few percent for years is exceptionally rare, because the base grows underneath it.
How many months should I use?
Enough to smooth seasonality — at least six, ideally twelve. Calculating CMGR across three months of a good quarter produces a projection nobody should act on.