CAGR Calculator
By Jan Suski. I go deep on every review, checking every number against its source and digging up details other coverage misses, a habit from six years of SEO and link building for tech companies. Bylines at Surfer, Brand24, and Senuto. How the scoring works.
Enter a starting value, an ending value, and the number of years between them, and this online CAGR calculator returns the compound annual growth rate: the single annual rate that would carry an initial investment to its final value if it compounded annually. Type a fractional year, like 3.5, for a holding period that doesn't land on a clean anniversary. The result updates as you type, no submit button required.
CAGR strips away every up year and down year in between and reports the one steady rate that produces the same outcome. Use it to compare a stock position, a business's revenue, or a savings account across different investment options on a level playing field.
Time period: 0 days (0 years)
CAGR
0%
compound annual growth rate
Total growth
$0
Absolute return
0%
total, not annualized
This is the geometric mean of the yearly growth factors, not a simple average of the yearly percentage changes.
Project this rate forward
| Scenario | Assumed CAGR | Projected value |
|---|---|---|
| Conservative | 0% | $0 |
| At this rate | 0% | $0 |
| Aggressive | 0% | $0 |
CAGR smooths every up year and down year into one figure; it doesn't measure the risk taken to get there, and it can't be used once cash is added or withdrawn partway through (use XIRR for that). Cross-check the projection above against a named benchmark for the same asset class before treating this one flat rate as a forecast.
How this is calculatedformula, sourced constants
CAGR runs on three inputs: the initial investment (present value, PV), the final value (future value, FV), and the number of years, or time period (n), between them. The CAGR formula is CAGR = (FV / PV)^(1/n) - 1; every term in that formula is the real one, with nothing simplified away.
Rearranged, FV = PV x (1 + CAGR)^n solves for the final value if you know the rate, and PV = FV / (1 + CAGR)^n solves for the initial value. Each version of the CAGR calculation answers a different question with the same three numbers.
CAGR is a geometric mean of the year-by-year growth factors, multiplied together across each of the consecutive periods; an arithmetic average of the yearly percentage changes is a different calculation entirely. Some call the result the average annual growth rate, and the label isn't wrong: it's specifically the geometric kind of average.
A portfolio that gains 50% one year and loses 50% the next averages 0% by the simple method, but it's down 25% in real terms; the geometric CAGR catches that, and a straight average of the yearly changes won't. That's why CAGR gives a clearer picture of investment performance than a naive average does.
n doesn't have to be a whole number. A holding period of 980 days, short of a clean run of years, still works the same way: divide the day count by 365 and enter the decimal. The fractional-year example below shows the full math.
Worked example$10,000 to $25,000 over 6 years
Start with a $10,000 initial investment. Six years later, it's worth $25,000. To calculate the CAGR by hand: CAGR = (25,000 / 10,000)^(1/6) - 1 = 16.50%. Check it by working forward: $10,000 compounded at 16.50% for six years lands back at the same $25,000 final value.
The investment grew 150% in total dollar terms over that time frame, but its CAGR reads as 16.50% a year: the formula spreads the total growth evenly across each year of the investment period, turning one lump sum into a steady annual pace.
A fractional-year case: an $8,000 initial value grows to $9,600 over 980 days. n = 980 / 365 = 2.68 years. CAGR = (9,600 / 8,000)^(1/2.68) - 1 = 7.03%. Set that against the six-year example and the shorter time period posted a similar annual pace, even though its investment value grew by a smaller dollar amount.
What this does and doesn't tell youone clean number, real limits
CAGR reduces a certain period of time to one clean number, and that's exactly its blind spot. The S&P 500 fell 37.00% in 2008 and rose 32.39% in 2013 (SmartAsset, S&P 500 Average Annual Return, updated 23 Aug 2026); an investor who held through both years sees neither figure in the CAGR, only the smooth rate that bridges the start and end values. Treat one clean percentage as the whole story and you've put all your eggs in one basket.
It also says nothing about investment risk. A higher CAGR doesn't mean lower risk involved in getting there; two funds can post the same CAGR return over the same time horizon while one swings twice as hard along the way.
CAGR and absolute return measure different things. The six-year example above grew 150% in total dollar terms but posted a 16.50% CAGR; a one-year position with the same 150% total growth would show a 150% CAGR instead. Read both figures together; each answers a different question about the same investment.
The formula only works with a single starting value, a single ending value, and no cash added or withdrawn in between. A brokerage account with monthly contributions needs the extended internal rate of return method (XIRR), because XIRR accounts for the timing and size of each cash flow that CAGR's single-inflow, single-outflow formula can't capture.
It's still the standard for evaluating performance in a personal finance comparison. Mutual fund fact sheets routinely quote 1-, 3-, and 5-year CAGR figures side by side, each expressed at the same average rate, so a saver compares funds without normalizing anything first.
What does CAGR mean?no formula recap, plain definition
Compound annual growth rate. In a nutshell, CAGR measures the same rate of growth every year that would carry a starting value to an ending value, smoothing out the fits and starts an investment took to get there. That's the whole CAGR calculation, start to finish.
Can CAGR be negative?yes, when the ending value falls
Yes. If the ending value is lower than the starting value, the formula returns a negative percentage. An initial investment that fell from $10,000 to $7,000 over four years posts a CAGR of -8.53%.
Is a CAGR of 7% considered good?depends on the benchmark and asset
It depends on what you're measuring against, and over what time period. The S&P 500 posted a CAGR of about 10.4% a year with dividends reinvested from April 1957 to April 2025, or roughly 6.5% after inflation (SmartAsset, updated 23 Aug 2026).
A 7% CAGR on a diversified stock portfolio over a five year period sits close to par for the course against that benchmark; the same 7% on a savings account would be well above the going rate for cash, since the value of the investment barely moves at typical deposit rates.
How do I calculate a fractional-year CAGR, like months or days?convert the period into a decimal year
Convert the holding period into years as a decimal. Three years and eight months is 3.67 years (44 months / 12); 980 days is 2.68 years (980 / 365). Enter that decimal as n.
How is CAGR different from IRR or XIRR?one cash flow vs. a series of them
CAGR needs exactly one inflow and one outflow, at the start and the end. Internal rate of return (IRR) and its date-aware variant, XIRR, handle a series of cash flows landing on different dates, like contributions to a retirement account or a business's irregular revenue. Use CAGR for a single lump sum; use XIRR once money moves in or out partway through.