Compound Annual Growth Rate Calculator

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Ending Value

$

Number of Years

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Contribution Frequency None Annually Semi-Annually Quarterly Monthly

CAGR Results

CAGR

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%

Annualized growth rate

Total Growth

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%

Percentage increase

Final Value

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USD

Ending value with contributions

0%

Investment Details

Detail	Value
Beginning Value	-
Ending Value	-
Investment Period	-
Additional Contributions	-
Contribution Frequency	-
Total Contributions	-
Total Growth Amount	-

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Year-by-Year Growth

Year	Beginning Value	Contributions	Growth	Ending Value
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Calculation History

Date	Beginning Value	Ending Value	Years	CAGR	Currency	Actions

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This calculator provides estimates only. Investments involve risk including possible loss of principal.

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Understanding CAGR: Your Complete Guide to Investment Growth Calculation

Learn how to measure investment performance with our easy-to-use CAGR Calculator - no finance degree required!

Have you ever looked at your investments and wondered, "What's my average yearly return?" That's exactly what Compound Annual Growth Rate (CAGR) tells you! It's like a report card for your investments that smooths out all the ups and downs into one easy-to-understand number.

In this guide, we'll walk you through everything you need to know about CAGR, complete with real examples, simple formulas, and our interactive calculator that does all the math for you.

What Is CAGR (Compound Annual Growth Rate)?

CAGR is the average annual growth rate of an investment over a specific time period, assuming the profits are reinvested each year. Think of it as the "smoothed" growth rate that would turn your starting amount into your ending amount if growth was steady every year.

Simple Example:

You invest $10,000 and after 5 years it grows to $20,000:

• Your money doubled in 5 years
• Your CAGR would be approximately 14.87%
• This means your investment grew by about 14.87% each year, on average

Try Our CAGR Calculator

Skip the complex math! Our calculator handles everything from basic growth calculations to complex scenarios with regular contributions.

The Simple Formula Behind CAGR

The Magic Formula:

CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) - 1

Then multiply by 100 to get a percentage

Let's break this down into simple terms:

What is "Beginning Value"?

Beginning Value is how much your investment was worth when you started. This is your initial investment amount.

Beginning Value Example:

You invest in a mutual fund:

• Initial investment: $5,000
• Beginning Value = $5,000

What is "Ending Value"?

Ending Value is how much your investment is worth at the end of the period. This includes all growth and reinvested dividends.

Ending Value Example:

Your mutual fund after 3 years:

• Current value: $7,500
• Ending Value = $7,500

What are "Years"?

Years is the total time period of your investment. You can use fractions of years too (like 2.5 years for 2 years and 6 months).

Putting It All Together: A Real Calculation

Complete Calculation Example:

Let's calculate the CAGR for our mutual fund example:

1. Beginning Value: $5,000
2. Ending Value: $7,500
3. Years: 3
4. Step 1: $7,500 ÷ $5,000 = 1.5
5. Step 2: 1.5^(1 ÷ 3) = 1.5^0.333 = 1.1447
6. Step 3: 1.1447 - 1 = 0.1447
7. Step 4: 0.1447 × 100 = 14.47% CAGR

Your investment grew by an average of 14.47% per year!

Pro Tip: Why CAGR Beats Simple Averages

Simple averages don't account for compounding. If your investment grows 50% one year and loses 25% the next, the simple average would be 12.5%, but your actual return would be lower due to compounding effects. CAGR gives you the true picture!

What Do Different CAGR Results Mean?

Not all CAGRs are created equal! Here's how to interpret your results:

CAGR Range	What It Means	Investment Quality
Below 0%	Investment lost value over time	🔻 Poor
0% - 5%	Conservative growth, similar to bonds	⚠️ Conservative
5% - 10%	Moderate growth, typical of diversified portfolios	✅ Good
10% - 15%	Strong growth, above average returns	🏆 Excellent
Above 15%	Exceptional growth, high-performing investments	🚀 Outstanding

Important Context:

Higher CAGR usually means higher risk. A 20% CAGR might sound amazing, but it could also mean your investment was very volatile. Always consider risk alongside returns!

Key Features of Our CAGR Calculator

50+ Currencies

Calculate in your local currency - from US Dollars to Japanese Yen, Euro, and more.

Visual Charts

See your investment growth visualized with beautiful, interactive charts.

History Tracking

Save calculations and track investment performance over time.

Regular Contributions

Calculate CAGR with monthly, quarterly, or annual additional investments.

Export Results

Save results as PDF, HTML, or text files for reports or sharing.

Year-by-Year Breakdown

See detailed growth projections for each year of your investment.

How to Use the Calculator (Step by Step)

Step 1: Enter Your Beginning Value

Enter how much your investment was worth when you started. For new investments, this is the amount you initially invested.

• Example: $10,000 initial investment
• Tip: Include all initial costs if possible

Step 2: Enter Your Ending Value

Enter how much your investment is worth now (or at the end of your measurement period).

• Example: $15,000 current value after 3 years
• Tip: Subtract any fees or taxes for accurate results

Step 3: Enter the Number of Years

Enter how long you've held the investment. You can use decimals for partial years.

• Example: 3.5 years (3 years and 6 months)
• Tip: Be precise for accurate CAGR calculation

Step 4: Add Regular Contributions (Optional)

If you regularly added money to your investment, enter that information:

• Amount: How much you added each time
• Frequency: Monthly, quarterly, annually, etc.
• Example: $100 added monthly for 3 years

Step 5: Select Your Currency

Choose from 50+ currencies - we'll handle all the formatting for you!

Quick Calculation Tip

Our calculator automatically saves your inputs as you type. You don't need to click "save" - it happens automatically!

Real-World Applications of CAGR

For Personal Investors

• Portfolio Performance: Compare how different investments performed
• Goal Setting: Calculate how much you need to save for retirement
• Investment Decisions: Choose between different investment options

For Business Owners

• Revenue Growth: Measure company growth over time
• Investment Analysis: Evaluate business expansion opportunities
• Performance Tracking: Monitor progress toward business goals

For Financial Professionals

• Client Reporting: Provide clear performance metrics
• Portfolio Analysis: Compare fund managers and strategies
• Risk Assessment: Evaluate investment volatility

Frequently Asked Questions (15 Common Questions)

1. What's a "good" CAGR for investments?

It depends on the investment type. For stocks, 8-10% is good (historical S&P 500 average). For bonds, 4-6% is typical. For real estate, 6-8% is common. Always compare to relevant benchmarks!

2. What's the difference between CAGR and average annual return?

CAGR accounts for compounding, while simple average doesn't. If your investment goes up 50% one year and down 25% the next, the simple average is 12.5%, but CAGR is actually 0% (you're back where you started).

3. Can CAGR be negative?

Yes! A negative CAGR means your investment lost value over time. For example, if you invested $1,000 and ended with $800 after 3 years, your CAGR would be negative.

4. How does CAGR handle market volatility?

CAGR smooths out volatility by giving you a single annual rate. A volatile investment with big ups and downs might have the same CAGR as a steady one, but the journey was much bumpier!

5. Should I use CAGR for short-term investments?

CAGR is most meaningful for periods of at least 3-5 years. For very short periods (less than a year), other metrics might be more appropriate since annualizing short-term results can be misleading.

6. How do dividends affect CAGR calculations?

For accurate CAGR, reinvest all dividends. If dividends are taken as cash instead of reinvested, your actual CAGR would be lower than calculated. Our calculator assumes reinvestment unless otherwise specified.

7. What's the Rule of 72 and how does it relate to CAGR?

The Rule of 72 estimates how long it takes to double your money: 72 ÷ CAGR = years to double. If your CAGR is 9%, you'll double your money in about 8 years (72 ÷ 9 = 8).

8. How can I improve my investment's CAGR?

Three main ways: 1) Choose higher-performing investments, 2) Reinvest all earnings (compounding), 3) Add regular contributions (dollar-cost averaging). Our calculator shows how contributions affect CAGR!

9. Why do financial advisors love CAGR?

CAGR provides a single, comparable number that accounts for time and compounding. It's perfect for comparing different investments over different time periods - apples to apples!

10. What's the difference between CAGR and annualized return?

They're essentially the same thing! CAGR is the specific formula, while "annualized return" is the general concept. Both give you the average yearly growth rate.

11. Can I calculate CAGR for non-financial things?

Absolutely! CAGR works for any growth measurement: website traffic, social media followers, company revenue, population growth - anything that compounds over time.

12. What if I made withdrawals from my investment?

CAGR calculations assume no withdrawals. If you took money out, you need to adjust your beginning and ending values accordingly, or use a more complex calculation like internal rate of return (IRR).

13. How accurate is CAGR for irregular cash flows?

Basic CAGR assumes no cash flows except beginning and ending. For irregular contributions/withdrawals, use our calculator's contribution feature or consider using Internal Rate of Return (IRR) for more precision.

14. What's better: high CAGR over short time or moderate CAGR over long time?

For wealth building, consistent moderate growth over long periods usually beats short bursts of high growth. A 7% CAGR for 30 years turns $10,000 into $76,123. A 15% CAGR for 10 years only gets you to $40,456 from the same start.

15. Can I save and compare multiple CAGR calculations?

Yes! Our history feature lets you save unlimited calculations and export them for comparison. Perfect for tracking different investments or scenarios over time.

The Power of Compounding: A Final Thought

CAGR isn't just a math formula - it's a window into the magic of compounding. Albert Einstein reportedly called compound interest "the eighth wonder of the world," and CAGR helps you measure that wonder in your own investments.

Remember:

Small differences in CAGR create huge differences over time. A 1% higher CAGR might not seem like much, but over 30 years, it could mean doubling your ending wealth. That's why precise calculation matters!

Whether you're evaluating past investments, planning for the future, or just curious about how your money grows, understanding CAGR gives you financial superpowers. And with our calculator, you don't need to be a math whiz to use them!