INVESTMENT CALCULATOR
Calculate the compound annual growth rate of an investment over time.
COMPOUND ANNUAL GROWTH RATE
Based on these values, the investment grew at an average compounded rate of approximately 14.87% per year over 5 years.
CAGR is a smoothed historical growth rate. It does not show volatility or predict future returns.
ILLUSTRATIVE PATH
Selected currency: USD
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DETAILED BREAKDOWN
| Year | Starting Value | Annual Growth | Ending Value | Cumulative Return |
|---|---|---|---|---|
| Year 1 | $10,000.00 | $1,486.98 | $11,486.98 | 14.87% |
| Year 2 | $11,486.98 | $1,708.10 | $13,195.08 | 31.95% |
| Year 3 | $13,195.08 | $1,962.09 | $15,157.17 | 51.57% |
| Year 4 | $15,157.17 | $2,253.85 | $17,411.01 | 74.11% |
| Year 5 | $17,411.01 | $2,588.99 | $20,000.00 | 100.00% |
CAGR stands for Compound Annual Growth Rate. It represents the smoothed annual rate that would take a beginning value to an ending value over a selected period. CAGR assumes compounded growth, but it does not show the actual year-to-year path or volatility.
Total return measures the complete percentage gain or loss over the full period. CAGR converts that result into an annualized compounded rate. Two investments can have the same total return but different CAGR values when their holding periods differ.
CAGR is not the arithmetic average of yearly returns. It accounts for compounding. Average annual return may differ when yearly returns fluctuate.
CAGR can help compare stocks, ETFs, mutual funds, revenue growth, earnings growth, portfolio values, and business metrics. Meaningful comparisons should use similar time periods and comparable data.
CAGR smooths all growth into one annual rate, hiding volatility and drawdowns. It does not reflect the timing of deposits or withdrawals, is not an IRR or XIRR calculation, and does not predict future returns. Strong historical CAGR does not guarantee future performance.
CAGR stands for Compound Annual Growth Rate.
Divide the ending value by the beginning value, raise the result to the power of one divided by the number of years, then subtract one.
There is no universal good CAGR. A meaningful assessment depends on risk, time period, inflation, fees, taxes, and the appropriate benchmark.
CAGR is an annualized, compounded rate across a period. An investment’s actual return can vary substantially from year to year.
Total return measures the full-period percentage change. CAGR expresses that change as a smoothed annual compounded rate.
Only when dividends are included in the ending value you enter.
No. This calculator reports nominal growth unless you enter inflation-adjusted values.
Yes. CAGR is negative when the ending value is lower than the beginning value.
Yes. The calculator accepts periods such as 2.5 years and preserves the exact period in the calculation.
CAGR replaces the actual path with one constant compounded rate, so drawdowns and year-to-year changes are not shown.
CAGR uses only a beginning value, ending value, and time period. IRR can account for multiple cash flows occurring at different times.
Yes, when the investments use comparable data, similar periods, and consistent treatment of dividends and fees.
No. Historical growth does not guarantee or predict future performance.