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CAGR Calculator

Enter where an investment started, where it ended, and how many years it took — get its steady yearly growth rate.

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How the CAGR Calculator Works

CAGR (Compound Annual Growth Rate) is the single yearly rate that, compounded, grows a starting value into an ending value. The formula is: CAGR = (End Value ÷ Start Value)^(1 ÷ Years) − 1.

Example: $10,000 growing to $15,000 over 5 years. Divide 15,000 by 10,000 to get 1.5, raise it to the power of 1/5 to get about 1.0845, subtract 1 — the CAGR is about 8.45% a year. The total return is 50%, but the yearly rate is 8.45%, not 10%, because of compounding.

CAGR smooths out the bumps: it does not mean the investment grew by the same percentage every year. Two investments can share a CAGR with very different risk, so use it to compare, not as a promise of future returns.

Frequently Asked Questions

What is CAGR?
CAGR is the compound annual growth rate: the steady yearly rate that would grow a starting value into an ending value over a given number of years, assuming gains compound.
How is CAGR different from average return?
A simple average divides total return by years, which ignores compounding. CAGR accounts for compounding, so it is lower than the simple average for the same total gain — and it is the comparable figure.
Can CAGR be negative?
Yes. If the end value is lower than the start value, the CAGR is negative, showing the average yearly rate of decline.
What is a good CAGR?
It depends on the asset. Stock markets have historically averaged around 10% a year over long periods; anything consistently above that is strong, but past growth never guarantees future returns.

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