CAGR Calculator
Calculate the Compound Annual Growth Rate of an investment from beginning value, ending value, and time period.
Enter investment values and click calculate.
What This Calculator Does
This calculator determines the Compound Annual Growth Rate (CAGR) of an investment, showing the smoothed annual rate of return that turns a beginning value into an ending value over a specific time period. It also provides total return, absolute gain, and the Rule of 72 doubling time.
The Formula
CAGR represents the constant annual growth rate that would produce the same final result as the actual variable returns. It smooths out volatility to provide a single comparable rate. For example, growing $10,000 to $25,000 in 10 years yields a CAGR of 9.6%, even if individual years varied widely.
Step-by-Step Example
Enter beginning value
The initial investment or starting value. Example: $10,000.
Enter ending value
The final value of the investment. Example: $25,000.
Enter time period
The number of years between beginning and ending values. Example: 10 years.
Analyze results
CAGR of 9.6%, total return of 150%, and Rule of 72 doubling time of 7.5 years.
Real-World Use Cases
Investment Performance
Compare the growth rate of different investments, funds, or asset classes over the same or different time periods.
Business Revenue Growth
Calculate the compound growth rate of revenue, profit, or user base to assess business trajectory.
Financial Goal Planning
Determine what CAGR you need to achieve to reach a financial goal within a specific timeframe.
Common Mistakes to Avoid
Confusing CAGR with average annual return. If an investment goes up 100% one year and down 50% the next, the average return is +25% but CAGR is 0%.
Using CAGR for very short periods (under 3 years) where it may not provide meaningful insight due to limited data.
Assuming CAGR represents actual year-by-year performance. CAGR is a smoothed metric that masks volatility.
Forgetting to account for fees, taxes, and inflation when comparing CAGR across investments.
Frequently Asked Questions
Accuracy and Disclaimer
CAGR is a historical metric that smooths actual returns into a constant rate. Past growth rates do not predict future performance. This calculator is for educational and informational purposes only and is not investment advice.
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