CAGR Calculator
Enter a starting value, an ending value and the time between them to find the compound annual growth rate — the single number that makes any two investments comparable.
What CAGR actually measures
Investments rarely grow at a steady pace. A fund might return +25% one year, −15% the next, +8% the year after. CAGR compresses all of that into one hypothetical number: the constant annual rate that would have produced the same end result. It's the standard way to compare funds, portfolios, business revenue and even salary growth across different time spans.
Example: $10,000 growing to $20,000 over 7 years gives (2)^(1/7) − 1 ≈ 10.4% per year. The doubling took seven years, not two — CAGR is what stops the total-growth figure from misleading you.
Three ways people misuse CAGR
1. Comparing different periods
A fund up 34% over 3 years and another up 20% over 1 year are not comparable until both are annualized — the second is a 20% CAGR, the first only 10.2%. Always CAGR both sides before choosing.
2. Ignoring deposits and withdrawals
CAGR assumes no cash moved in or out. If you added $5,000 to an account mid-period, part of the "growth" is your own money. For portfolios with regular deposits, CAGR overstates real performance — that's why fund fact sheets use time-weighted returns while your personal account uses money-weighted (IRR) returns.
3. Reading it as a promise
A past CAGR is a description, not a forecast. Sequencing matters: two portfolios with identical 10-year CAGRs can feel completely different depending on whether the bad years came early or late.
Frequently asked questions
What is a good CAGR?
For context, the S&P 500 has historically returned roughly 7–10% annualized over long windows. Anything sustained above that over a decade is genuinely above-market.
Can CAGR be negative?
Yes — if the ending value is below the beginning value, CAGR is negative and represents an annualized decline.
How does CAGR differ from average return?
The arithmetic average of +50% and −50% is 0%, but $100 → $150 → $75 is a −13.4% CAGR. CAGR reflects what actually happened to your money; the average does not.