CAGR Calculator: Compound Annual Growth Rate

Find the compound annual growth rate (CAGR) of an investment, a business or any value: enter the start value, end value and the years between them. CAGR is the steady yearly rate that would turn one into the other.

The CAGR formula

CAGR = (Ending value ÷ Starting value)^(1 ÷ Years) − 1

Example: $10,000 that grows to $18,000 in 5 years: (18,000 ÷ 10,000)^(1/5) − 1 = 12.47% a year. The total return is 80%, but CAGR spreads it into an equivalent steady yearly rate.

Why CAGR instead of average return?

A simple average of yearly returns can be misleading. If an investment rises 50% one year and falls 50% the next, the average is 0%, but you’ve actually lost 25% ($100 → $150 → $75). CAGR captures that: it’s the rate that really links the start and end values.

What CAGR doesn’t show

Volatility: two investments with the same CAGR can have very different ups and downs along the way. The drawdown calculator helps with that side.
Deposits and withdrawals: CAGR assumes a single starting amount. Money added along the way inflates the result.
The future: a past CAGR is not a forecast.

Going the other way, from a rate to a future value, use the compound interest calculator. For a simple gain on one investment, see the ROI calculator.

ChartWatch is independent and not affiliated with TradingView, any broker or exchange. This calculator uses only the numbers you enter and runs in your browser. Results are estimates before taxes and any costs you leave out. It is a calculation tool, not financial advice.

FAQ

How do you calculate CAGR?

Divide the ending value by the starting value, raise the result to the power of 1 divided by the number of years, and subtract 1. Multiply by 100 for a percentage.

What is a good CAGR?

It depends on the asset and the risk taken. Compare a CAGR with a relevant benchmark over the same period rather than with a fixed number.

Can CAGR be negative?

Yes. If the ending value is lower than the starting value, CAGR is negative.

What is the difference between CAGR and average annual return?

Average annual return is a simple average of yearly returns; CAGR is the compound rate that actually turns the starting value into the ending value, so it accounts for the effect of losses.

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