CAGR Calculator
Compute the compound annual growth rate (CAGR) — the smoothed per-year growth rate that turns a beginning value into an ending value over a number of years.
How to use the cagr calculator
- Enter the value at the start of the period (portfolio value, revenue, users — anything measurable).
- Enter the value at the end of the period.
- Enter the number of years between the two measurements.
- Use the CAGR result to compare against benchmarks or other investments.
Formula
About this calculator
CAGR answers one question: what steady yearly rate would take me from the beginning value to the ending value? Real-world growth almost never happens at a steady rate — a fund might gain 30%, lose 10%, gain 15% — and the arithmetic average of those years overstates performance. CAGR is the honest, smoothed number.
This makes CAGR the standard for comparing investments, funds, and even company revenue across different time windows. When a fund fact sheet says it returned "12.4% annualized over 5 years," that is CAGR, not the sum of yearly returns.
Two cautions: CAGR is sensitive to the start and end dates you choose — picking a trough and a peak can double the result, so use fixed, arbitrary windows (calendar years) for fairness. And CAGR assumes no deposits or withdrawals in between; for portfolios with cash flows, use a money-weighted return instead.
Frequently asked questions
What is a good CAGR?
For public equity investments, 7–10% annualized is historically solid. High-growth companies often target 20–30% revenue CAGR, though it is rarely sustainable for long.
CAGR vs average annual return — which is right?
CAGR. The simple average of yearly returns ignores compounding and volatility drag, and it always equals or exceeds CAGR when returns vary.
Can CAGR be negative?
Yes. If the ending value is below the beginning value, CAGR is negative and represents the average yearly decline.
Does CAGR work for less than one year?
Technically yes, but annualizing short periods magnifies noise. A 5% gain in one month annualizes to roughly 80%, which is not a realistic forecast.