Initial investment, revenue, or metric value
Final value at the end of the period
Year by year breakdown of your investment growth
| Year | Starting Balance | Contributions | Interest Earned | Ending Balance |
|---|---|---|---|---|
| Year | $0 | $0 | +$0 | $0 |
| Year | $0 | $0 | +$0 | $0 |
| Year | $0 | $0 | +$0 | $0 |
| Year | $0 | $0 | +$0 | $0 |
| Year | $0 | $0 | +$0 | $0 |
auto_awesome AI Tip: Starting early is the key to compound growth — even small amounts add up significantly over time
The starting amount — what you invested or the metric's initial value.
The final amount at the end of the time period.
How many years between the beginning and ending values (decimals OK, e.g. 2.5).
See the annualized growth rate, total return, growth multiple, and doubling time.
CAGR represents the constant annual rate at which the beginning value would have to grow to reach the ending value. It's a 'smoothed' rate — the actual yearly returns may have been more volatile, but CAGR tells you the equivalent steady growth rate. This makes it easy to compare investments with different time horizons and lumpy returns.
CAGR = (Ending Value / Beginning Value)^(1/years) − 1
CAGR smooths out volatility — actual yearly returns can be very different
Always compare CAGR over the same time period when evaluating investments
Rule of 72: divide 72 by CAGR% to estimate years to double your money
CAGR can be negative if the ending value is less than beginning value
CAGR doesn't tell you the riskiness — two investments with same CAGR can have very different volatility
For non-investment metrics (revenue, users), CAGR shows true growth pace independent of period length
CAGR is a geometric mean — it's always less than or equal to the arithmetic mean of yearly returns
Compound Annual Growth Rate, or CAGR, is the gold standard for comparing investment performance across different time periods. Unlike simple average returns, CAGR accounts for the compounding effect — where each year's gains build on the previous year's ending balance. This distinction matters enormously: a portfolio that gains 100% then loses 50% has a simple average return of 25% per year, but the actual CAGR is 0% because you end up right where you started. Financial analysts, portfolio managers, and individual investors use CAGR to evaluate mutual fund returns, compare stock performance, benchmark revenue growth, and set realistic financial goals. The S&P 500 has delivered a CAGR of roughly 10.5% over the past 50 years, a figure far more useful than any single-year return. This CAGR calculator takes your beginning value, ending value, and number of years, then computes the annualized growth rate, total return percentage, growth multiple, and the doubling time implied by that rate. Use it to analyze any metric that grows over time — investment portfolios, company revenue, GDP figures, or even website traffic.
CAGR captures the true compounded growth path, while simple averages can be misleading. Imagine a stock that returns +50% one year and −50% the next: simple average = 0%, but the stock has actually fallen from $100 to $75 — a CAGR of about −13.4%. CAGR correctly reflects what happened to your money. This is why financial reports, fund prospectuses, and investment performance metrics almost always quote CAGR.
CAGR has two important limitations. First, it hides volatility: an investment with a 10% CAGR might have been smooth (+10% every year) or wild (+50%, −20%, +30%, −15% etc.). Second, CAGR assumes a single starting point and ending point — it doesn't account for additional contributions or withdrawals during the period. For investments with cash flows, IRR or MWRR are more appropriate. CAGR is best for comparing simple buy-and-hold returns over equal periods.
Data sourced from trusted institutions
All formulas verified against official standards.