// CAGR CALCULATOR
CAGR Calculator
Calculate the annualized growth rate between a starting value and ending value over a chosen number of years.
// INPUTS
// OUTPUT
CAGR
25.99%
GROWTH MULTIPLE4.00×
TOTAL ABSOLUTE RETURN300.00%
YEARS6
// FORMULA
// FORMULA
CAGR = (Ending Value / Starting Value) ^ (1 / Years) − 1
Result is expressed as a percentage per year.
// EXAMPLE
// WORKED OUT
If ₹1 becomes ₹4 in 6 years:
CAGR = (4 / 1) ^ (1 / 6) − 1
= 4 ^ 0.1667 − 1
= 1.2599 − 1
= 0.2599
= 25.99% per year// WHAT THIS MEANS
CAGR smooths out the bumpy reality of returns into one steady annual rate. It answers the question: if growth were perfectly even every year, what rate would take you from the start value to the end value? It is the most honest single number for comparing two investments held over different time periods.
// FAQ
Is CAGR the same as average return?+−
No. The arithmetic average can be misleading because it ignores compounding. CAGR uses geometric averaging, so it correctly reflects how a single sum would have grown.
Can CAGR be negative?+−
Yes. If the ending value is lower than the starting value, CAGR is negative — that is the annualized rate of decline.
Does CAGR account for additions or withdrawals?+−
No. CAGR only uses a single start and end value. If money was added or withdrawn during the period, use an IRR calculator instead.
What is a 'good' CAGR?+−
It depends on the asset class and time horizon. Compare a CAGR to the inflation rate and to a benchmark for the same asset and period to judge it.
// RELATED CALCULATORS
// RETURN MATH
Absolute Return to CAGR
Convert a total return into an annualized rate.
// RETURN MATH
CAGR to Absolute Return
Convert an annualized rate into a total return.
// COMPOUNDING
Doubling Time Calculator
How long money takes to double at a given rate.
// COMPOUNDING
Rule of 72 Calculator
Quick doubling-time approximation.