📊 CAGR Calculator
Enter a starting value, ending value and number of years to get the CAGR, the smoothed annual growth rate, along with the total return.
CAGR
12.47%
per year
Total return
80.00%
Growth multiple
1.80×
CAGR = (end ÷ start)^(1/years) − 1, the smoothed annual growth rate. Educational, not advice. 🔒 In your browser.
How the cagr calculator works
The compound annual growth rate is CAGR = (ending ÷ starting)^(1/years) − 1. It’s the constant annual rate that would take the start value to the end value over the period, smoothing out the ups and downs so you can compare investments of different lengths. The exponent 1/years takes the year-th root of the total growth multiple, which is what turns a cumulative gain into a per-year rate. Worked example: growing $10,000 to $16,000 over 4 years gives (1.6)^(1/4) − 1 ≈ 0.1247, or about 12.5% a year, meaning $10,000 compounding at 12.5% annually reaches $16,000 in four years.
CAGR hides volatility. It says nothing about the bumpy path in between, only the start and end. Educational, not financial advice.
Frequently asked questions
How do I calculate CAGR?
CAGR = (ending value ÷ starting value)^(1/years) − 1. Growing $10,000 to $18,000 over 5 years is (1.8)^(0.2) − 1 ≈ 12.5% per year.
What is CAGR used for?
To express an investment’s growth as a single annual rate, so you can compare returns over different time periods on an equal footing.
How is CAGR different from total return?
Total return is the overall percentage gain; CAGR is the equivalent smoothed annual rate. A 80% total return over 5 years is a CAGR of about 12.5%.
Does CAGR account for volatility?
No. It only uses the start and end values, ignoring the path between. Two investments with the same CAGR can have very different risk.
Can CAGR be negative?
Yes, if the ending value is below the starting value, CAGR is negative, showing an average annual loss.
What is the difference between CAGR and an average of yearly returns?
CAGR is a geometric (compounded) rate, while a simple average of annual returns is arithmetic. Because gains and losses compound, the arithmetic average overstates growth: returns of +50% then −50% average to 0% but the CAGR is negative, correctly reflecting that you ended below where you started.
Does CAGR account for deposits or withdrawals?
No. It uses only the start value, end value and time. If you added or withdrew money along the way, CAGR of the two endpoints will not reflect your true return; a money-weighted measure like IRR is needed for that.
Educational information, not financial advice. These calculators use standard formulas with the figures you enter; results are illustrations, not guarantees. For decisions about your money, consult a qualified, regulated financial professional.