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Investment Performance

CAGR Calculator

Calculate the smoothed compound annual growth rate between two dates.

Calculator inputs
$
$
yrs

CAGR

12.47%

Annual Compound Growth Rate

Total return

80.00%

Total gain

$8,000

Key insight

Annual growth
12.47%
Total return
80.00%
Growth Multiple
1.80×
$18,000 025 Beginning Value $10,000, Ending Value $18,000, Growth Multiple 1.80×, CAGR 12.47%Beginning Value: $10,000Ending Value: $18,000Growth Multiple: 1.80×CAGR: 12.47%Beginning Value $10,000, Ending Value $18,000, Growth Multiple 1.80×, CAGR 12.47%Beginning Value: $10,000Ending Value: $18,000Growth Multiple: 1.80×CAGR: 12.47%Beginning Value $10,000, Ending Value $18,000, Growth Multiple 1.80×, CAGR 12.47%Beginning Value: $10,000Ending Value: $18,000Growth Multiple: 1.80×CAGR: 12.47%Beginning Value $10,000, Ending Value $18,000, Growth Multiple 1.80×, CAGR 12.47%Beginning Value: $10,000Ending Value: $18,000Growth Multiple: 1.80×CAGR: 12.47%Beginning Value $10,000, Ending Value $18,000, Growth Multiple 1.80×, CAGR 12.47%Beginning Value: $10,000Ending Value: $18,000Growth Multiple: 1.80×CAGR: 12.47%Beginning Value $10,000, Ending Value $18,000, Growth Multiple 1.80×, CAGR 12.47%Beginning Value: $10,000Ending Value: $18,000Growth Multiple: 1.80×CAGR: 12.47%

How it's calculated

Formula

CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) − 1

How it works

CAGR is the single steady annual rate that turns the beginning value into the ending value. Raising the growth multiple to the power of 1 ÷ Years spreads the total growth evenly across each year, so it reflects compounding rather than a simple average.

Variables

CAGR
Compound Annual Growth Rate — the constant annual rate that would grow the beginning value into the ending value over the selected time period.
Beginning
Starting value
Ending
Final value
t
Number of years

Worked example

Step 1 Growth Multiple = Ending Value ÷ Beginning Value = $18,000 ÷ $10,000 = 1.80 Step 2 Annual Growth Factor = 1.80^(1 ÷ 5) = 1.1247 Step 3 CAGR = 1.1247 − 1 = 0.1247 = 12.47% The investment grew at about 12.5% per year — a total return of 80% over 5 years.

Frequently asked questions

How is CAGR different from average return?

CAGR reflects compounding and matches your actual ending balance. A simple average ignores order and volatility, so it overstates returns when they swing up and down.

Can CAGR be negative?

Yes. If the ending value is below the beginning value, CAGR is negative, showing an average annual loss.

Does CAGR mean the return was steady each year?

No. Real returns are lumpy. CAGR is the smooth-equivalent rate — the chart shows that idealized path, not the actual year-to-year journey.

Should I use CAGR to compare investments?

Yes, as long as they cover the same length of time. For different periods, annualize each one first so the comparison is fair.

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