GrowthCalc

CAGR Calculator

The single annual rate that, compounded each year, takes you from start to finish — the standard benchmark for comparing investments.

Starting value

Ending value

Years

What you entered

Start value: $10,000End value: $25,000Years: 5

1
Total return
($25,000.00 − $10,000.00) / $10,000.00= 150.00%
2
CAGR = (End/Start)^(1/n) − 1
($25,000.00 / $10,000.00)^(1/5) − 1= 20.1124%

Result

CAGR: 20.112%

An investment growing from $10,000 to $25,000 over 5 years has a compound annual growth rate of 20.11%.

Compound annual growth rate for a $10,000 investment

CAGR is the single steady annual rate that would take the starting value to the ending value over the period: (end / start)^(1/years) - 1. Every row starts at $10,000.

Ending value	Years held	Total growth	CAGR
$15,000	5	50%	8.45%
$20,000	5	100%	14.87%
$20,000	10	100%	7.18%
$25,000	10	150%	9.60%
$30,000	10	200%	11.61%
$50,000	15	400%	11.33%
$100,000	20	900%	12.20%
$100,000	30	900%	7.98%

Compare the second and third rows: the same doubling is 14.87% a year over five years and 7.18% over ten. That is the whole reason to use CAGR rather than total return. The last two rows make the same point at scale - a tenfold gain is an outstanding 12.20% a year over 20 years and an ordinary 7.98% over 30. CAGR deliberately smooths away the path taken, so it says nothing about volatility or drawdowns along the way, and it assumes no deposits or withdrawals during the period.

Why CAGR beats average return

Simple average return ignores compounding — an investment that gains 100% then loses 50% has a 25% average return but actually ends exactly where it started (CAGR = 0%). CAGR captures the actual experienced growth, making it the standard for comparing fund performance.

Limitations of CAGR

CAGR assumes smooth growth and hides volatility — two investments with the same CAGR can have very different risk profiles. It also ignores cash flows (deposits/withdrawals) during the period; for that you'd need money-weighted return (IRR).

Using CAGR to compare investments

CAGR normalizes returns across different time periods. A stock that grew from $100 to $200 in 5 years (CAGR: 14.9%) performed better annually than one that grew from $100 to $300 in 10 years (CAGR: 11.6%), even though the second had a higher total return.

Frequently asked questions

How do you calculate CAGR?

CAGR = (End Value / Start Value)^(1/Years) − 1. Example: invested $10,000, worth $18,000 after 5 years. CAGR = ($18,000/$10,000)^(1/5) − 1 = 1.8^0.2 − 1 = 12.47% per year. This means 12.47% compounded annually for 5 years takes $10,000 to $18,000.

What is a good CAGR for investments?

S&P 500 historical CAGR: ~10% nominal, ~7% after inflation. A 'good' CAGR depends on the asset class and risk. Real estate: 3–5% appreciation. Bonds: 2–5%. Individual stocks: highly variable. Any CAGR above 15% sustained over 10+ years is exceptional.

What is the difference between CAGR and annualized return?

They're the same thing. CAGR IS the annualized return — both smooth total growth into a constant yearly rate. The term 'CAGR' emphasizes that it accounts for compounding (unlike simple average return, which doesn't).