CAGR Calculator

CAGR — the compound annual growth rate — is the single, steady yearly rate that would take an investment from its starting value to its ending value over a given number of years. It is one of the most useful ways to compare investments, because it expresses lumpy, real-world returns as one clean annualized number.

What is CAGR?

If an investment grew from a beginning value to an ending value over n years, its CAGR is:

• CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ n) − 1

Multiply by 100 to express it as a percentage. The result answers the question: “What constant annual rate, compounded each year, produces this growth?”

This calculator also reports two companions:

• Total return — the cumulative percentage gain over the entire period.
• Growth multiple — how many times the money grew (ending ÷ beginning).

How to use this calculator

1. Enter the beginning value — what the investment was worth at the start.
2. Enter the ending value — what it is worth now (or at the end of the period).
3. Enter the number of years the investment was held (decimals are fine, e.g. 2.5).
4. Read the CAGR, total return, and growth multiple.

Examples

Doubling in five years. $1,000 grows to$2,000 over 5 years. The multiple is 2, the total return is 100%, and the CAGR is 2^(1/5) − 1 ≈ 14.87%.

Quadrupling in two years. $100 →$400 over 2 years gives a multiple of 4, a total return of 300%, and a CAGR of 4^(1/2) − 1 = 100% per year.

A loss. If $5,000 falls to$4,000 over 4 years, the CAGR is (0.8)^(1/4) − 1 ≈ −5.43% per year.

Frequently asked questions

How is CAGR different from average return? A simple average of yearly returns ignores compounding and can mislead. CAGR accounts for compounding and reflects the actual start-to-finish growth.

Does CAGR account for deposits or withdrawals? No. It assumes a single lump sum left untouched. For cash flows in and out, use money-weighted measures like IRR.

Can CAGR be negative? Yes — when the ending value is below the beginning value, CAGR is negative, representing an annualized loss.

References

• Compound Annual Growth Rate (CAGR) — Investopedia
• What is CAGR? — Corporate Finance Institute