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CAGR Calculator

Calculate the Compound Annual Growth Rate (CAGR) of an investment, or project future value using expected growth rate.

Compound Annual Growth Rate (CAGR)

8.45%

Absolute Return

$50,000.00

Total Return

50.00%

Years

5

CAGR Formula

CAGR=(FVPV)1n−1\text{CAGR} = \left(\frac{\text{FV}}{\text{PV}}\right)^{\frac{1}{n}} - 1

Growth Projection

YearGrowthValue
0—$100,000.00
1$8,447.18$108,447.18
2$9,160.73$117,607.90
3$9,934.55$127,542.45
4$10,773.74$138,316.19
5$11,683.81$150,000.00

What is CAGR?

Compound Annual Growth Rate (CAGR) represents the smoothed annual rate of return of an investment over a given time period, assuming profits are reinvested at the end of each year. It removes the effect of volatility and provides a single annualized growth rate.

How to Use

  1. 1

    Choose a mode: Standard CAGR, Exact Dates, or Future Value

  2. 2

    For CAGR: enter present value, future value, and number of years

  3. 3

    For Exact Dates: enter values and specific start/end dates

  4. 4

    For Future Value: enter present value, expected CAGR, and years

  5. 5

    View the growth rate, year-by-year table, and KaTeX formula

Examples

Good Examples

Standard CAGR

$100,000 → $150,000 in 5 years = 8.45% CAGR

Future value projection

$50,000 at 10% CAGR for 10 years = $129,687

Date-based CAGR

$10,000 (Jan 2020) → $18,000 (Jul 2024) = 15.51% CAGR

Bad Examples

Using CAGR as a guarantee

Past CAGR does not predict future performance

Ignoring volatility

CAGR hides year-to-year swings — a 10% CAGR could mean -20% then +40%

Common Mistakes

  • Confusing CAGR with simple average return — CAGR accounts for compounding
  • Using CAGR as a guarantee of future returns
  • Ignoring volatility — CAGR hides the ups and downs
  • Choosing misleading start/end dates that skew the result
  • Using CAGR for investments with interim cash flows — use IRR instead

Frequently Asked Questions

Q

What is a good CAGR?

A "good" CAGR depends on the context. For stock market investments, a CAGR of 7–10% over 10+ years is considered solid (roughly matching the historical S&P 500 average). For a startup, 20–30% CAGR may be expected. Always compare CAGR to relevant benchmarks.

Q

Can CAGR be negative?

Yes, a negative CAGR means the investment lost value over time. For example, if 10,000dropsto10,000 drops to 7,000 over 3 years, the CAGR is approximately -11.2%.

Q

What is the difference between CAGR and IRR?

CAGR measures growth from a single initial investment to a final value. IRR (Internal Rate of Return) can handle multiple cash flows at different times. Use CAGR for simple investments; use IRR when there are contributions or withdrawals during the period.

Q

How does CAGR differ from average annual return?

The simple average of yearly returns ignores compounding. CAGR accounts for compounding and gives the actual annualized growth rate. For example, returns of +25%, -20%, +25% average to 10%, but the CAGR is only 7.72%.