CAGR Calculator
CAGR (compound annual growth rate) smooths a multi-year return into a single annual percentage, as if the investment had grown at a steady rate every year. It is the cleanest way to compare two assets held for different lengths of time, or to describe how fast revenue, a portfolio or a single stock actually grew. Enter a beginning value, an ending value and the number of years, and this calculator returns the CAGR along with the total growth and the growth multiple.
How to calculate CAGR
-
1
Enter the beginning and ending value
The amount you started with and the amount you ended with, in the same currency. Dividends or contributions are not included — CAGR measures price growth between two points.
-
2
Enter the number of years
The holding period. Use decimals for partial years (e.g. 2.5 years) to keep the rate accurate.
-
3
Read the results
CAGR is the smoothed annual rate. Total growth is the raw percentage change, and the growth multiple shows how many times the money grew.
The formula
CAGR answers one question: what single annual rate, compounded every year, turns the beginning value into the ending value over the holding period?
CAGR = (Ending Value / Beginning Value)^(1 / Years) - 1
Multiply by 100 to express it as a percentage. The growth multiple is simply Ending Value / Beginning Value, and total growth is (Ending Value / Beginning Value - 1) × 100.
A worked example
Suppose you invested $1,000 and it grew to $5,000 over 5 years.
- Growth multiple: 5,000 / 1,000 = 5.00×
- Total growth: (5.00 - 1) × 100 = 400%
- CAGR: (5.00)^(1/5) - 1 = 0.3797 = 37.97%
So even though the money grew 400% in total, the smoothed annual rate is about 38% per year — far less alarming than the headline number, and directly comparable to any other annualized return.
Comparison table
| Beginning | Ending | Years | Multiple | Total growth | CAGR |
|---|---|---|---|---|---|
| $1,000 | $2,000 | 5 | 2.00× | 100% | 14.87% |
| $1,000 | $5,000 | 5 | 5.00× | 400% | 37.97% |
| $1,000 | $5,000 | 10 | 5.00× | 400% | 17.46% |
| $10,000 | $9,000 | 3 | 0.90× | -10% | -3.45% |
Notice that the same 5× multiple gives a very different CAGR depending on whether it happened over 5 or 10 years — that is exactly why CAGR exists.
Common pitfalls
- CAGR is not the average of yearly returns. A +50% year followed by a -50% year leaves you down 25% overall, not flat. CAGR captures that; a simple average does not.
- It hides volatility. Two investments can share an identical CAGR while one rode a smooth line and the other swung wildly. Always look at the path, not just the endpoints.
- It ignores contributions and withdrawals. If you added or removed money along the way, use a money-weighted return (IRR) instead.
- Garbage in, garbage out. A misremembered start date or a value that includes reinvested dividends on one side but not the other will skew the rate.
Frequently Asked Questions
It depends on the asset and the risk. The long-run US stock market has delivered roughly a 7-10% nominal CAGR. For an individual stock or a startup, expectations are higher because the risk is higher. Compare a CAGR against a relevant benchmark, never in isolation.
Total return (total growth) is the raw percentage change between the start and the end, regardless of time. CAGR annualizes that change so you can compare investments held for different periods on an apples-to-apples basis.
Yes. If the ending value is lower than the beginning value, the CAGR is negative, describing the steady annual rate of decline. This calculator handles negative results correctly.
No. The calculation runs in your browser as you type, and nothing you enter is uploaded, saved or shared. The numbers exist only in the page you are looking at.
Related Tools
BMI Calculator
Calculate body mass index from height and weight. Shows WHO category, healthy-weight range and limitations of BMI.
Inflation Calculator
Calculate the equivalent purchasing power of a dollar across any two years using historical CPI data from 1913 to today.
GPA Calculator
Calculate grade point average from letter grades and credit hours. Supports US 4.0 and 5.0 honors scales with the standard A/B/C/D letter table.
Scientific Calculator
Full scientific calculator with trig, log, exponents, factorial, memory, parentheses and DEG/RAD toggle. Runs in your browser.
Calorie Calculator
Estimate daily calorie needs for your goal using Mifflin-St Jeor BMR and activity factors. Includes deficit and surplus targets.
Rising Sign Calculator
Estimate your rising sign from birth date and birth time. This quick astrology calculator uses a simple two-hour block method, not a full birth chart.