CAGR Calculator
CAGR Calculator finds the smoothed annual compound rate that would turn a positive starting value into an ending value over a stated number of years. It does not show the actual year-by-year path, volatility, cash flows, fees, taxes, or risk. A volatile investment and a steadily growing value can share the same CAGR.
Runs locally — files stay on your deviceHow is CAGR calculated?
Divide ending value by starting value, take the result to the power of one divided by years, then subtract one.
Formula: CAGR = (ending ÷ starting)^(1/years) − 1
CAGR is an equivalent constant compound rate
CAGR answers which fixed annual rate reproduces the same start and finish over the period. It is geometric rather than an arithmetic average of annual percentage changes.
How it works
Enter positive comparable start and end values plus a positive duration in years. Report the dates and whether cash flows occurred, because contributions or withdrawals can make CAGR misleading.
Key concepts
Smoothing hides the path
CAGR replaces all intermediate movements with one equivalent rate.
Cash flows break the simple interpretation
External additions can raise ending value without being investment return.
When to use it
- Summarize start-to-end growth over multiple years.
- Compare equal-basis periods using a smoothed annual rate.
- Check a manually calculated compound growth rate.
When not to use it
- Do not describe CAGR as the actual return earned each year.
- Do not ignore deposits, withdrawals, dividends, fees, or taxes.
- Do not use the basic real-valued formula with zero or negative starting values.
Worked examples
Value doubles in ten years
- Input
Start 1,000; end 2,000; years 10- Expected output
About 7.18% CAGR
Compounding 7.18% for ten years approximately doubles the value.
Declining value
- Input
Start 1,000; end 800; years 4- Expected output
About −5.43%
A negative CAGR represents equivalent annual decline.
Large interim volatility
- Input
Same start and end with large swings- Expected output
Same CAGR
Intermediate risk is not captured.
Common mistakes
Averaging annual returns arithmetically
Compounding is multiplicative. Correction: Use the geometric CAGR formula.
Ignoring cash contributions
Ending value then reflects both returns and added capital. Correction: Use a cash-flow-aware return measure.
Calling CAGR a forecast
Historical smoothing does not predict future results. Correction: Describe the measured period and uncertainty.
Best practices
- Use comparable valuations and precise dates.
- Disclose cash flows and omitted costs.
- Pair CAGR with volatility and drawdown context.
Related operations and differences
Break-Even Price Calculator
Choose Break-Even Price Calculator when you need to find the unit price that covers cost and fees.; use CAGR Calculator specifically for cagr.
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Limitations and privacy
- This calculator provides a mathematical estimate, not financial, tax, legal, or investment advice.
- Only start, end, and time are modeled.
- Positive starting value and positive years are required.
- CAGR hides volatility and does not predict future performance.
Financial inputs are calculated locally in this browser and are not uploaded.
Frequently asked questions
Is CAGR the average of annual returns?
No. It is the geometric constant rate linking start and end.
Does CAGR show volatility?
No. It ignores the path between endpoints.
Can CAGR be negative?
Yes, when a positive ending value is below the positive start.
Does CAGR account for deposits?
No. External cash flows require another return method.