What is a CAGR Calculator?
CAGR (Compound Annual Growth Rate) restates the growth between two values over any period as a single, smoothed annual rate — as if it had grown by exactly that percentage every year, even though real returns are rarely that even. It's the standard way to compare investments held for different durations, or to compare a volatile investment's growth against a fixed deposit's stated rate.
Enter the beginning value, the ending value, and the number of years between them to get the CAGR.
How CAGR is calculated
n is the number of years between the two values. Because CAGR smooths out volatility, it can look healthy even for an investment that had a very bumpy path — it only describes the start and end points, not what happened in between.
Frequently asked questions
Is CAGR the same as average annual return?
No. A simple average of yearly returns can overstate real growth because it ignores compounding and the order of gains and losses. CAGR is the geometric, compounding-consistent measure and is almost always the more meaningful one.
Can CAGR be negative?
Yes — if the ending value is lower than the beginning value, CAGR will be negative, correctly reflecting an overall loss over the period.
Does CAGR account for additional investments along the way?
No — it only compares a single beginning and ending value. If you added money at multiple points in time, XIRR is the correct measure instead.