CAGR stands for Compound Annual Growth Rate. It represents the smoothed annual rate at which an investment grew from its starting value to its ending value over a specific period, assuming the growth compounds each year. It's the most common metric for comparing investment returns across different time periods.

How is CAGR calculated?

CAGR = (Ending Value / Starting Value)^(1 / Years) − 1. For example, if an investment grew from $10,000 to $16,105 over 5 years, CAGR = (16,105/10,000)^(1/5) − 1 = 0.10 = 10% per year.

What is a good CAGR for investments?

The S&P 500 has historically produced a CAGR of about 10% per year before inflation. A CAGR of 7–10% is generally considered strong for a diversified stock portfolio. For individual stocks or business metrics, higher CAGRs are possible but come with higher risk.

What is the difference between CAGR and average annual return?

Average annual return adds up returns and divides by years. CAGR compounds them, giving the actual geometric growth rate. For volatile investments, CAGR is always equal to or lower than the simple average. CAGR is more accurate for measuring actual investment performance.

3 calculation modes Year-by-year table Investment & business

CAGR Calculator

Compound Annual Growth Rate — the cleanest way to compare investment or business growth across time. Calculate CAGR from two values, project a future value, or find how long to reach a target.

Calculate CAGR What is CAGR?

All calculations happen in your browser. No data is stored.

Calculate CAGR

I know the starting value, ending value, and number of years.

Result

CAGR —

Total return —

Total gain —

Year-by-year growth

Find Future Value

I know the starting value, CAGR, and years — what will it be worth?

Result

Future value —

Total gain —

Total return —

Year-by-year growth

What Is CAGR?

The definition

CAGR (Compound Annual Growth Rate) is the rate at which an investment would have grown each year, at a constant rate, to get from a starting value to an ending value over a given period. It "smooths out" year-to-year volatility into a single representative growth rate.

Formula: CAGR = (End / Start)^(1/Years) − 1

Common uses

Investments: Compare stock, ETF, or fund performance over different time periods on a level playing field.
Business: Revenue, user, or profit CAGR is a standard metric in business presentations and pitch decks.
Goal planning: "If I need $500,000 in 15 years and have $100,000 now, what CAGR do I need?" — Mode 1 answers that.
Benchmarking: Compare your portfolio CAGR against the S&P 500 (~10% historical) or other benchmarks.

CAGR vs simple average return

If a $10,000 investment gains 50% in year 1, then loses 33% in year 2, the simple average is (50% − 33%) / 2 = 8.5%. But the actual value is back to $10,000 — a 0% CAGR. CAGR is always more accurate because it reflects what actually happened to your money.

Rule of 72

Divide 72 by the CAGR percentage to estimate how many years it takes to double your money. At 7% CAGR: 72 ÷ 7 ≈ 10.3 years to double. At 10%: 72 ÷ 10 = 7.2 years. It's a fast mental check — use this calculator for the precise answer.

Compound Interest & Savings Planner

Project future value with regular contributions — goes beyond CAGR to model monthly investing.

Plan savings →

Retirement Calculator

Use an assumed CAGR to project your retirement balance and monthly income at a target date.

Project retirement →

Net Worth Calculator

Track your total financial picture. Combine with CAGR to measure how fast your net worth is growing.

Calculate net worth →

FAQ

What does CAGR stand for?

CAGR stands for Compound Annual Growth Rate. It measures the mean annual growth rate of an investment or metric over a specified time period, assuming the growth is compounded annually.

Can CAGR be negative?

Yes. If an investment lost value over the period, the CAGR will be negative. For example, if $10,000 fell to $7,000 over 5 years, the CAGR is (7000/10000)^(1/5) − 1 ≈ −6.9% per year.

What is a realistic CAGR for the stock market?

The S&P 500 has delivered approximately 10% CAGR over the long run (before inflation), or about 7% after inflation. Individual stocks, sectors, or international markets can vary significantly — use CAGR to compare across different investments on equal footing.

Is CAGR the same as annualized return?

Yes — they're the same concept. "Annualized return" and CAGR both refer to the geometric mean annual growth rate. Some contexts use "annualized return" for investment performance and "CAGR" for business metrics, but the calculation is identical.