CAGR Calculator

The compound annual growth rate (CAGR) captures the average yearly growth of an investment as if it grew at a steady rate, smoothing out volatility. It is a handy way to compare performance across funds, portfolios, or business metrics over multi-year periods. This calculator keeps the result panel open at all times so you can drop in starting value, ending value, and number of years and immediately see CAGR, total gain, and annualized growth. Choose a display currency to keep numbers familiar—conversion is not fetched live, but the symbol anchors your mental math.

Inputs: starting value is the amount at the beginning of the period; ending value is the amount at the end. Years can be fractional if your period is shorter or longer than full years (e.g., 2.5). If you know monthly or quarterly data, convert to years by dividing months by 12 or quarters by 4. If either value is zero or negative, CAGR is not meaningful in the standard form; the calculator will show zero outputs so you know to adjust your inputs.

Formula: CAGR = (Ending / Starting)^(1 / Years) - 1. Total gain is Ending - Starting. Annualized multiple is simply Ending / Starting. This simplifies communication: “the investment grew at a 7.9% CAGR over five years,” or “a 2.2x multiple over the period.” When comparing funds, pair CAGR with risk metrics and drawdowns—high CAGR with severe volatility might not suit your tolerance.

Interpretation tips: CAGR hides the path of returns. Two investments can share the same CAGR but one could have big swings while the other is steady. Use CAGR for high-level comparisons, then examine volatility, maximum drawdown, and sequence of returns for a fuller view. For goals like retirement, consider whether the CAGR you assume is conservative enough to weather market downturns.

Inflation and fees: CAGR here is nominal and ignores taxes and fees. If you want a “real” CAGR adjusted for inflation, subtract an estimated inflation rate from the nominal CAGR (approximately) or deflate the ending value before computing CAGR. For after-fee performance, reduce ending value by the fees paid or by estimated expense ratios applied annually.

Business metrics: CAGR is also used for revenue, users, or subscribers. Ensure consistency in measurement (e.g., fiscal vs. calendar periods) and watch for one-off events that distort start or end values. CAGR can overstate trend quality if the end period is unusually strong or weak, so complement it with period-over-period growth rates and retention metrics.

Scenario planning: experiment with different ending targets to back into the CAGR required to reach a goal. If you want an investment to double in seven years, you need roughly a 10.4% CAGR. The rule of 72 approximates this: 72 / CAGR ≈ years to double. Conversely, 72 / years ≈ CAGR needed to double in that time.

Action steps: select currency, enter starting value, ending value, and years. Review CAGR, total gain, and multiple. If the required CAGR looks aggressive for your risk profile, extend the time horizon, increase contributions, or lower the target. For portfolio review, compare CAGR of each holding versus its benchmark to see which positions are adding value.