📈 CAGR Calculator

Find the compound annual growth rate (CAGR) of any investment or asset.

Starting Value

Ending Value

Number of Years

CAGR

14.87%

Compound annual growth rate

Total Return

100.00%

Over 5 years

Profit

$10,000

$10,000 → $20,000

Year-by-Year Growth

Year	Value at 14.87% CAGR
0	$10,000
1	$11,487
2	$13,195
3	$15,157
4	$17,411
5	$20,000

📈 What is CAGR?

Compound Annual Growth Rate tells you the single annualized rate that would take your starting value to the ending value in a smooth line. It's the fairest way to compare returns across investments of different lengths.

Formula: CAGR = (End / Start)^(1/Years) − 1

How This Tool Works

CAGR (Compound Annual Growth Rate) measures the mean annual growth rate of an investment over a specified time period, assuming profits are reinvested at the end of each year. It smooths out the volatility of year-to-year returns to give you a single annualized rate that represents steady growth from the beginning value to the ending value. CAGR is widely used by investors, analysts, and business professionals to compare investment performance, evaluate company growth, and project future returns.

Formula / Methodology

CAGR = (Ending Value / Beginning Value)^(1/n) − 1 where n = number of years.

💡 Tips & Best Practices

1CAGR is ideal for comparing investments with different time horizons on an apples-to-apples basis.
2The S&P 500 has a historical CAGR of roughly 10% (before inflation) or 7% (after inflation) over the past century.
3CAGR hides volatility — an investment with wild yearly swings can have the same CAGR as a steady one.
4Use CAGR to evaluate business revenue growth, not just investments — it is a standard metric in company valuation.

Frequently Asked Questions

How is CAGR different from average return?

Average return is the arithmetic mean of yearly returns, which can be misleading. If an investment gains 100% one year and loses 50% the next, the average return is 25% — but you are actually back to where you started (CAGR = 0%). CAGR reflects the actual compounded outcome.

What is a good CAGR?

It depends on the asset class and time period. For stocks, 7–10% CAGR over 10+ years is strong. For real estate, 3–5% is typical. For a high-growth startup, 20%+ is expected. Always compare against a relevant benchmark.