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CAGR Calculator
Measure the annual growth of an investment.
Currency: USD · Amounts use this currency. Values are not converted.
Uses your entered rates and the stated formula. Fees and taxes are excluded.
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CAGR
14.87%
- Absolute return
- 100%
- Total growth
- $100,000.00
CAGR = [(Final ÷ Initial)^(1 ÷ Years) − 1] × 100
How to use this tool
- Enter the starting value and the ending value measured in the same currency or unit.
- Enter the elapsed duration in years, using a fraction for a partial year.
- Calculate the annualized rate and compare only periods with compatible assumptions.
Formula & method
CAGR = [(final value ÷ initial value)^(1 ÷ years) − 1] × 100. CAGR smooths growth into a constant annual rate. It does not describe interim volatility and is unsuitable for cash flows made during the period without adjustment.
A practical example
An investment growing from 100,000 currency units to 200,000 currency units in five years has a CAGR of approximately 14.87%.
When this tool is useful
Summarize growth between two endpoints for a metric such as revenue or an investment value. CAGR gives a constant-rate equivalent that makes different durations easier to compare, without implying that each year actually grew at that rate.
Common mistakes and limitations
- Extra deposits or withdrawals distort an investment CAGR because the ending value includes cash flows.
- A smooth annualized result hides losses and volatility during the period.
Frequently asked questions
Can CAGR be negative?
Yes. A lower ending value produces a negative annualized rate when the starting value and duration are positive. The result describes a decline between endpoints.
Is CAGR the same as an average of yearly returns?
No. CAGR reflects compounding between endpoints. An arithmetic average of yearly percentages can differ because gains and losses multiply against changing balances.
These figures are estimates for information only, not financial or tax advice. Actual terms, fees, rates, and returns can differ. Read the financial disclaimer.