CAGR Calculator
The compound annual growth rate (CAGR) is the single steady yearly rate that would have taken an investment from its starting value to its ending value. It strips out the year-to-year bumps and gives you one clean number you can compare across assets, funds, or businesses. This calculator returns the CAGR, the total growth, and the absolute gain in any currency.
- Beginning value
- Absolute gain
- Total growth
- 100.00%
- Absolute gain
- $10,000.00
- Years
- 5
Growing from 10,000 to 20,000 over 5 years is a compound annual growth rate of 14.87%. Total growth was 100.0%, but CAGR smooths that into a steady 14.87% per year.
How it works
Real investments rarely grow by the same amount each year — one year is up 30%, the next is down 10%. CAGR answers the question: what single, unchanging yearly rate would have produced the same end result? It does this by taking the ratio of ending to beginning value, then applying the inverse of the number of years as an exponent to undo the compounding.
Because CAGR is a geometric average rather than a simple one, it correctly accounts for compounding. This is why a portfolio that doubles over five years has a CAGR of about 14.9% per year, not 20% — the 100% total gain is spread across five compounding periods, and compounding means each year builds on the last.
CAGR is the standard way fund factsheets and annual reports quote multi-year performance. The calculator also shows total growth (the raw percentage change) and the absolute gain in your currency, so you can see both the smoothed rate and the actual money involved. Use the currency switcher at the top to view the figures in your own units.
CAGR = ((Ending value ÷ Beginning value)^(1 ÷ years) − 1) × 100. It is the constant yearly rate that, compounded over the period, turns the beginning value into the ending value.
Worked example
An investment grows from 10,000 to 20,000 over 5 years. The total growth is 100% — it doubled. But the CAGR = ((20,000 ÷ 10,000)^(1/5) − 1) × 100 ≈ 14.87% per year. So although the value doubled, the equivalent steady annual rate is just under 15%, because each year of growth compounds on the one before. The absolute gain is 10,000.
Things to watch out for
CAGR assumes a single deposit at the start and a single value at the end — it does not handle ongoing contributions or withdrawals. For a stream of regular investments, use an annuity or SIP calculator instead. CAGR also hides volatility: two investments can share the same CAGR while one took a far rockier path, so always pair it with a measure of risk. If the ending value is below the beginning value, CAGR is negative, representing a compounded annual decline. A very short period (well under a year) can produce a misleadingly extreme annualized figure.
Frequently asked questions
Why is CAGR lower than the total growth divided by the number of years?+
Because CAGR is a compound (geometric) rate, not a simple average. Dividing total growth by years ignores that each year builds on the previous balance. CAGR correctly accounts for that compounding, so it is the more accurate per-year figure.
What is the difference between CAGR and annualized return?+
They are the same concept. CAGR is the term used when measuring the growth of a single value over time; annualized return is the broader name for restating any total return as a yearly compound rate.
Does CAGR account for ongoing contributions?+
No. CAGR assumes one starting value and one ending value with nothing added or removed in between. If you make regular contributions, use a tool built for periodic investments instead.
Can CAGR be negative?+
Yes. If the ending value is lower than the beginning value, CAGR is negative and represents the compounded annual rate of decline.
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Disclaimer: This calculator is for educational and informational purposes only and provides estimates, not financial advice. Interest rates, taxes, fees, and local rules vary and change over time. Confirm figures with a qualified professional before making any financial decision.
Last reviewed: 2026-06-22