What was your investment’s real annual growth rate? This free CAGR calculator smooths out year-to-year volatility into a single, comparable compound annual growth rate.
Investment values
$
$
CAGR
–
Enter beginning value and number of years
Total growth
–
How the CAGR Calculator Works
CAGR (compound annual growth rate) smooths out an investment’s uneven year-to-year swings into one steady annual growth rate, letting you compare returns across different holding periods on equal footing.
Formula: CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Number of Years) − 1.
- Beginning value — what your investment was worth at the start of the period
- Ending value — what your investment is worth at the end of the period
- Number of years — how many years passed between the beginning and ending values
Example Scenarios
| Beginning Value | Ending Value | Years | CAGR |
|---|---|---|---|
| $10,000 | $18,000 | 5 | 12.5% |
| $5,000 | $10,000 | 10 | 7.2% |
| $20,000 | $20,000 | 3 | 0.0% |
| $1,000 | $2,000 | 3 | 26.0% |
| $10,000 | $15,000 | 4 | 10.7% |
CAGR Calculator FAQ
How is CAGR different from a simple average annual return?
A simple average just adds up each year’s return and divides by the number of years, while CAGR accounts for compounding by measuring the single steady growth rate that would take the beginning value to the ending value. CAGR is usually lower than the simple average when returns are volatile.Can CAGR be negative?
Yes. If your ending value is lower than your beginning value, entering those figures will produce a negative CAGR, reflecting an overall decline in value across the period rather than growth.Does CAGR account for volatility or losses that happened along the way?
No, CAGR only looks at the beginning and ending values, so it hides any dips, crashes, or spikes that occurred in between. Two investments with the same CAGR can have had very different, and very different feeling, rides to get there.How can I use CAGR to compare two different investments?
Calculate the CAGR for each investment using its own beginning value, ending value, and time period, then compare the resulting percentages directly. Because CAGR is annualized, it works even when the two investments were held for different lengths of time.Can I use CAGR to figure out how long it will take to reach a savings goal?
This calculator solves for CAGR given a time period, not the reverse, but you can use a known or assumed CAGR along with your beginning value and goal to estimate the years needed by rearranging the formula or trying different year values until the ending value matches your goal.Does CAGR include dividends and reinvested distributions, or just price growth?
That depends entirely on what you enter as your beginning and ending values. If you use total account value including reinvested dividends, the CAGR reflects total return; if you use price alone, it reflects price appreciation only.Related Calculators
To dig deeper into an investment’s performance, pair this with the ROI calculator or the compound interest calculator, or use the investment calculator to project future growth at a chosen rate.