CAGR Calculator

Compound Annual Growth Rate — solve for CAGR, initial investment, terminal value, or years.

Solve For

Start Value ($)

End Value ($)

Years

Months

CAGR

9.6%

Total Gain:$15000

Absolute Return:150%

Compounding Growth Curve

What is CAGR?

CAGR (Compound Annual Growth Rate) is the rate at which an investment would have grown if it grew at a steady annual compounding rate. Formula: CAGR = (End / Start)^(1/Years) − 1.

Unlike absolute return, CAGR factors in the time horizon and compound interest, making it the standard tool for comparing stock gains, mutual funds, or real estate assets. Use this calculator to solve for any compounding variable and review progression charts client-side.

Built and maintained by Meet Shah · Last updated 1 August 2026

What this tool is used for

Turning a start and end value into a single annual growth rate.
Comparing two investments over different periods on one measure.
Working backwards to find the end value a rate implies.
Checking a fund's stated annualised return.
Producing a rate to compare against a benchmark.

Frequently Asked Questions

What does CAGR actually mean?: The single constant growth rate that would take you from the starting value to the ending value over the period: (end ÷ start)^(1/years) − 1. It is a smoothed rate, so it deliberately hides how bumpy the path actually was.
How is it different from an average annual return?: An arithmetic mean overstates growth whenever returns vary. Up 50% then down 50% averages to zero but leaves you down 25% — CAGR reports the −13.4% a year that actually happened. For anything that compounds, the geometric figure is the honest one.
What does it not tell me?: Risk, and drawdown. Two investments can share a CAGR while one moved steadily and the other halved before recovering. CAGR also says nothing about deposits or withdrawals along the way — for those, you need a money-weighted return instead.
Can it handle a negative or zero starting value?: No. A root of a negative ratio is undefined and a zero start makes the ratio infinite, so CAGR is meaningless for a business that began at zero revenue — which is exactly the case where it gets quoted most enthusiastically.
How should the period be counted?: As the elapsed years between the two values, not the number of data points. Five annual figures span *four* years of growth; using five inflates the denominator and understates the rate — a mistake that survives in a lot of published spreadsheets.

Common errors and gotchas

Reading CAGR as an actual yearly return, when it is a smoothed rate that hides all volatility.
Comparing periods of different lengths, where a short window flatters or punishes unfairly.
Using it on a series that went negative, where the formula breaks down.
Ignoring contributions and withdrawals, which make CAGR the wrong measure entirely.
Treating a past rate as a forecast, when it is a description of what happened.