CAGR Calculator

CAGR (Compound Annual Growth Rate) is the constant annual rate at which an investment would have grown from its beginning value to its ending value, assuming profits were reinvested each year. It expresses uneven, real-world growth as a single smooth yearly percentage.

CAGR = (Ending Value / Beginning Value)^(1 / number of years) − 1. For example, growing $10,000 to $25,000 over 7 years is (25000/10000)^(1/7) − 1 ≈ 13.96% per year.

A simple average just adds the yearly returns and divides — but it overstates growth because it ignores compounding and volatility. CAGR reflects the actual compounded result, so it's a more honest measure of how an investment performed.

Higher is generally better for an investment, but context matters. For reference, the long-run stock market has historically delivered roughly 7–10% annualized. Compare a CAGR against a relevant benchmark and the risk taken to achieve it.

No. CAGR assumes a single starting amount and a single ending amount with nothing added or removed in between. If you made regular contributions, use a future value or money-weighted return calculation instead.