Investment CAGR Calculator
Measure the yearly growth rate of an investment, not just the total return.
Recent
Formula
How the calculation works
CAGR takes the ratio of final to initial value and spreads the growth evenly across the years, giving one comparable annual rate.
The absolute return is the simpler total gain, and the multiple shows how many times your money grew.
Common mistakes
- Reading CAGR as a promise: it is a smoothed average and hides the swings along the way.
- Comparing investments of different lengths by total return alone, where CAGR is the fairer measure.
When to use it
- Use it to compare how fast two investments grew, even if you held them for different lengths of time.
- It is not a forecast; past CAGR says nothing certain about the years ahead.
Worked example
100,000 growing to 200,000 in 5 years is a 14.87% CAGR and a 100% total return.
Common questions
What is the difference between CAGR and total return?
Total return is the whole gain; CAGR spreads it evenly per year so you can compare investments of different lengths.
Can CAGR be negative?
Yes, if the final value is below the initial value the CAGR is negative.
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