CAGR Calculator
Calculate the Compound Annual Growth Rate of your investments
The initial value of your investment
The final value of your investment
The investment duration (can include decimals)
Compound Annual Growth Rate
%
CAGR Scale
Total Growth
Absolute value gained
Total Return
%
Overall percentage return
Growth Multiplier
×
How many times it grew
Calculation Summary
| Beginning Value | |
| Ending Value | |
| Number of Years | years |
| Total Growth | |
| Total Return | % |
| CAGR | % |
CAGR Ratings Reference
| Rating | CAGR Range | Description |
|---|---|---|
| Negative growth - investment lost value Below inflation in most cases Typical for bonds and conservative investments Historical S&P 500 average range Strong performing investments Outstanding performance - verify legitimacy |
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About CAGR Calculator
What is CAGR?
Compound Annual Growth Rate (CAGR) is a useful measure that describes the rate at which an investment would have grown if it had grown at a steady rate. It represents the smoothed annual rate of return, assuming the investment compounds over the time period.
The CAGR Formula
The formula for calculating CAGR is:
CAGR = (Ending Value / Beginning Value)^(1/n) - 1
Where:
- Ending Value = The final value of the investment
- Beginning Value = The initial value of the investment
- n = Number of years
How to Use This Calculator
- Enter your Beginning Value - the initial investment amount
- Enter your Ending Value - the final value after the investment period
- Enter the Number of Years - the investment duration
- The calculator instantly shows your CAGR percentage
CAGR vs. Average Return
CAGR differs from a simple average return because it accounts for compounding. For example:
- Year 1: +50% growth ($100 → $150)
- Year 2: -33.3% decline ($150 → $100)
Simple Average: (50% - 33.3%) / 2 = 8.35%
CAGR: (100/100)^(1/2) - 1 = 0%
CAGR provides a more accurate picture of investment performance.
When to Use CAGR
- Comparing investments over different time periods
- Evaluating stock or portfolio performance
- Business revenue growth analysis
- Any scenario requiring smoothed annual returns
Limitations
- Assumes steady growth (smooths out volatility)
- Doesn't account for risk or volatility
- Past performance doesn't guarantee future results
Frequently Asked Questions
Is higher CAGR always better?
Not necessarily. A higher CAGR might come with higher risk. Consider the volatility and risk involved alongside CAGR.
What is a good CAGR for investments?
Historically, the S&P 500 has delivered around 10% CAGR. A "good" CAGR depends on the asset class and risk tolerance.
Can CAGR be negative?
Yes, if the ending value is lower than the beginning value, CAGR will be negative, indicating an overall loss.
Note: This calculator provides estimates for educational purposes only. Consult a financial advisor for investment decisions.
Quick Tips
🎯 Using CAGR Wisely
- • Compare investments over the same time periods
- • Consider risk alongside CAGR
- • Use for long-term investment analysis
⚠️ Remember
- • CAGR smooths out volatility
- • Past performance ≠ future results
- • Consult a financial advisor