CAGR Calculator
Calculate the Compound Annual Growth Rate (CAGR) of an investment. Find the steady annual return over a time period.
Enter beginning value, ending value, and years.
CAGR Formula
CAGR = (Ending Value / Beginning Value)^(1/n) − 1
CAGR measures the mean annual growth rate of an investment over a specified period longer than one year.
Example: Investment grows from $10,000 to $25,000 in 5 years.
CAGR = (25000/10000)^(1/5) − 1 = 2.5^0.2 − 1 = 20.11%
CAGR = (25000/10000)^(1/5) − 1 = 2.5^0.2 − 1 = 20.11%
FAQ
Is CAGR the same as average annual return?
No. CAGR is a smoothed rate assuming compounding. Simple average return sums yearly returns and divides by n. CAGR accounts for compounding and is generally more accurate for measuring investment performance.
What are the limitations of CAGR?
CAGR hides volatility. Two investments with the same CAGR can have very different risk profiles. It also assumes you stayed invested for the entire period.
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Last updated: 2026-08-08