Calculate Compound Annual Growth Rate of your investments
The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer than one year. It represents one of the most accurate ways to calculate and determine returns for individual assets.
14.3%
annualized rate
Initial Investment
$10,000
Final Value
$19,500
Total Growth
95%
Time Period
5 years
| Year | Value | Growth |
|---|---|---|
| 0 | $10,000 | - |
| 1 | $11,430 | 14.3% |
| 2 | $13,061 | 14.3% |
| 3 | $14,928 | 14.3% |
| 4 | $17,062 | 14.3% |
| 5 | $19,500 | 14.3% |
The Compound Annual Growth Rate (CAGR) is a useful measure of growth over multiple time periods. It describes the rate at which an investment would have grown if it grew at a steady rate.
CAGR = (Ending Value / Beginning Value)1/Number of Years - 1
Our free CAGR calculator helps investors analyze the compound annual growth rate of their investments over time. Calculate the average annual return on stocks, mutual funds, business revenue, or any investment that compounds over multiple years.
Understand the smoother annual growth rate that would be required to grow your initial investment to its ending value, eliminating the volatility of year-to-year returns. Perfect for investment analysis, portfolio performance tracking, and financial planning.
Uses the standard CAGR formula: (Ending Value/Beginning Value)^(1/Years) - 1 for precise compound annual growth rate calculations.
Compare different investment options on an equal basis by eliminating the impact of volatility and different time periods.
Test different investment scenarios quickly to understand how time and return rates affect your wealth accumulation.
Learn how compounding works and why time is the most powerful factor in investment growth through detailed explanations.
Used by investors, financial advisors, and business analysts worldwide for accurate performance measurement and investment decision-making.
CAGR (Compound Annual Growth Rate) is the mean annual growth rate of an investment over a specified time period longer than one year. It represents one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time.
Unlike average annual return which simply averages yearly returns, CAGR accounts for compounding effects. It shows the smooth annual growth rate that would get you from the initial to the final value, making it better for comparing investments with different volatility patterns.
A good CAGR depends on the asset class and risk level. Generally, 7-10% CAGR is excellent for stock investments over the long term, while 2-4% might be good for conservative bonds. Always compare against relevant benchmarks and inflation rates.
Yes, CAGR can be negative if your investment loses value over the period. A negative CAGR indicates an average annual decline in value. This helps investors understand the severity of losses in annualized terms.
CAGR limitations include: it doesn't account for investment risk or volatility, assumes smooth growth (which rarely happens), and doesn't consider additional contributions or withdrawals during the investment period.