How to use this CAGR calculator
- Beginning value, the amount your investment was worth at the start of the period.
- Ending value, what the investment is worth now, or what it was worth at the end of the period.
- Number of years, how long the money was invested. You can use decimals, so 18 months is 1.5 years.
The results update instantly as you type. You will see your CAGR as a percent per year, your total growth across the whole period, and the growth multiple, which shows how many times your money grew. Nothing is submitted or stored, so the figures never leave your device.
How CAGR is calculated
Compound annual growth rate is the single, steady yearly rate that would turn your beginning value into your ending value over the period. The formula is the ending value divided by the beginning value, raised to the power of one over the number of years, minus one: CAGR = (ending value / beginning value) ^ (1 / years) - 1. Multiply the result by 100 to read it as a percent. Because the exponent uses the number of years, CAGR accounts for compounding, the way each year's growth builds on the last.
It helps to know how CAGR differs from total return. Total return, or total growth, is simply how much the value changed across the whole period: ending value divided by beginning value, minus one, times 100. It ignores time, so a 150% total return looks the same whether it took two years or twenty. CAGR fixes that by spreading the gain evenly across the years, giving you a per-year figure you can fairly compare against savings rates, index funds or other investments held for different lengths of time. CAGR is a smoothed average, though, so it hides the ups and downs that happened along the way.
A worked example
Suppose you invested $10,000 and five years later it was worth $25,000. The growth multiple is 25,000 / 10,000 = 2.5x, and the total growth is (2.5 - 1) x 100 = 150%. To find the CAGR, raise 2.5 to the power of 1/5 and subtract one: 2.5 ^ 0.2 = 1.2011, so the CAGR is about20.11% per year. In other words, a steady 20.11% annual return would have grown $10,000 into $25,000 over five years, even though the real returns may have jumped around from one year to the next.
Frequently asked questions
How do you calculate CAGR?
CAGR is the ending value divided by the beginning value, raised to the power of one over the number of years, then minus one. Multiply by 100 to show it as a percent. For example, $10,000 growing to $25,000 over 5 years is a CAGR of about 20.11% per year.
What is the difference between CAGR and total return?
Total return is the overall percent change across the whole period and ignores time. CAGR smooths that change into a single steady yearly rate, so you can compare investments held for different lengths of time on equal footing.
Is CAGR the same as the actual yearly return?
No. CAGR is a smoothed average. Real returns swing up and down year to year, but CAGR shows the constant rate that would have produced the same final value, hiding the volatility along the way.
What is a good CAGR?
It depends on the asset and the risk taken. As a rough benchmark, the long-run stock market has returned roughly 7% to 10% per year, so a CAGR well above that usually came with higher risk.
Is my data uploaded?
No, everything is calculated in your browser and nothing is sent anywhere.
This tool is for general information only and is not financial advice.
Related: ROI Calculator, Compound Interest Calculator, Inflation Calculator, Percentage Calculator.