CAGR Calculator
Calculate Compound Annual Growth Rate for any investment
Enter values above to calculate
How to Use
- Enter the beginning value of the investment.
- Enter the ending value of the investment.
- Enter the number of years between beginning and ending values.
- Click 'Calculate CAGR' to see the compound annual growth rate.
- Use CAGR to compare performance of different investments over time.
About CAGR
CAGR Formula
CAGR = (Ending Value / Beginning Value)^(1 / Years) − 1. For example, an investment that grew from $10,000 to $18,000 over 6 years: CAGR = (18,000/10,000)^(1/6) − 1 = 1.8^0.1667 − 1 = 10.3%. This means the investment grew at an equivalent steady rate of 10.3% per year.
Why Use CAGR
CAGR smooths out year-to-year volatility to show the steady-state growth rate. An investment might gain 30% one year and lose 20% the next — the average is 5% but the CAGR correctly shows a lower return. CAGR is the most accurate single number for describing investment performance over multiple years.
CAGR Benchmarks
Historical benchmarks for CAGR: US S&P 500 index 10-year CAGR ≈ 10–13%, global diversified portfolio ≈ 7–9%, real estate ≈ 3–7% (price appreciation only), gold ≈ 5–8% over very long periods. Individual stocks vary widely. A CAGR above 15% consistently over 10+ years is exceptional.
CAGR vs. Average Annual Return
CAGR and average annual return are different. If an investment gains 100% one year and loses 50% the next, the average return is 25% but the CAGR is 0% (you're back to where you started). CAGR is always more accurate for measuring actual wealth created. Use CAGR, not simple averages, for investment performance.
Key Features
- Precise CAGR calculation using the standard formula
- Shows total return percentage alongside the CAGR
- Illustrates growth by showing what $1,000 would grow to
- Useful for mutual fund, stock portfolio, and business revenue analysis