CAGR Calculator
CAGR smooths a bumpy journey into one honest number: the steady yearly rate that connects where you started to where you ended. Enter beginning value, ending value, and years.
Your results
Charts & visualization
Smoothed growth path
CAGR draws the straight compounding line between your two endpoints; reality wobbles around it.
Every chart’s underlying numbers are available as text — use the “view as table” control under each chart.
How it works
CAGR takes the ratio of end to start, takes the root equal to the number of years, and subtracts one. The result is the constant annual rate that would reproduce your endpoint from the starting point — smoothing away interim volatility entirely.
That smoothing is both its power and its blind spot: CAGR ignores the path. Two investments with identical endpoints but different drawdowns report identical CAGR, so pair it with risk awareness rather than treating it as complete.
Formula used
Beginning value— value at the start of the windowEnding value— value at the endyears— length of the window
Example calculation
Growing $10,000 into $26,000 over eight years equals a 12.69% compound annual rate — a 2.6× multiple overall. At that pace money doubles about every 5.8 years. Notice that the simple average would misleadingly suggest 20%/year (160% ÷ 8); compounding math says otherwise.
Assumptions & limitations
- Values are measured at consistent intervals (same date each year ideally).
- No intermediate deposits or withdrawals are accounted for — CAGR presumes a single growth journey.
- Negative or zero starting values make CAGR undefined.
- Past growth rates do not guarantee future ones.
Results are planning estimates based on your inputs and the stated assumptions — not financial advice or a loan offer. Verify important figures with your lender or advisor.
Frequently asked questions
What is a good CAGR?
For diversified equities, long-run averages near 7%–10% are historical benchmarks. Companies often target revenue CAGRs in double digits during growth phases. Compare against peers and benchmarks, not absolutes.
Why not just divide total growth by years?
That computes the arithmetic mean, which overstates what compounding delivers. A 100% gain followed by a 50% loss nets zero, yet averages +25%/year — CAGR correctly reports 0%.
Can CAGR be negative?
Yes — any endpoint below the start produces a negative rate, expressing the steady yearly decline connecting the two values.
What is the difference between CAGR and annualized ROI?
They are computed identically for single-period start/end comparisons. The names differ by convention: finance uses CAGR for growth rates, “annualized ROI” for investment returns.