Enter your starting amount, final amount, and holding period; the tool instantly shows the compound annual growth rate (CAGR). Example: $5 000 growing to $7 200 in four years equals 9.5 %. The S&P 500 delivered a 10.2 % CAGR between 1928-2023 (Macrotrends, https://www.macrotrends.net/2324/sp-500-historical-annual-returns).
Compound Annual Growth Rate Calculator
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How to use the tool
Beginning Value ($): Type the amount you invested. Examples: $5,250 or $9,300.
Ending Value ($): Type today’s value. Examples: $11,450 or $18,750.
Number of Years: Enter full years held. Examples: 3 years or 8 years.
Press “Calculate.” Your annualised return appears instantly, rounded to one decimal place.
where n is the number of years (Investopedia, https://www.investopedia.com/terms/c/cagr.asp).
Example calculation
Beginning Value: $5,000
Ending Value: $7,200
Period: 4 years
$$(7200/5000)^{1/4}-1 = 0.0954 \text{ or } 9.5\%.$$ Double-checked with a spreadsheet.
Quick-Facts
Typical long-term U.S. stock CAGR ≈ 10 % before inflation (Macrotrends, https://www.macrotrends.net/2324/sp-500-historical-annual-returns).
Negative CAGR signals a loss because ending value < starting value (Investopedia, https://www.investopedia.com/terms/c/cagr.asp).
Tool accepts $0.01-$1 000 000 000 and 1-100 years (Form constraints, 2024).
Formula assumes reinvestment of returns, matching SEC compound-interest guidance (SEC, https://www.investor.gov/additional-resources/compound-interest).
FAQ
What is CAGR?
CAGR is the constant annual growth rate your investment would need to move from its initial to final value when profits are reinvested (Investopedia, https://www.investopedia.com/terms/c/cagr.asp).
How does CAGR differ from an arithmetic average return?
An arithmetic average just sums yearly returns and divides by years; CAGR compounds each year, so it mirrors real-world reinvestment (CFA Institute, https://www.cfainstitute.org/en/research/foundation/2019/investment-math).
Can I use CAGR for non-financial metrics?
Yes. Analysts track user growth, revenue and electricity demand with CAGR because the formula only needs a start value, an end value and time (OECD Data, https://data.oecd.org/indicator/growth-rate.htm).
What does a negative CAGR tell you?
It shows the investment shrank on average each year; a −3 % CAGR means a 3 % yearly contraction (Investopedia, https://www.investopedia.com/terms/c/cagr.asp).
When is CAGR misleading?
CAGR ignores interim volatility; two assets can share a 7 % CAGR while one swings wildly and the other climbs steadily (Morningstar, https://www.morningstar.com/articles/volatility-vs-compounding).
How do I project an ending value from a target CAGR?
Rearrange the formula: Ending Value = Beginning Value × (1 + CAGR)^n (SEC, https://www.investor.gov). Insert your desired CAGR as a decimal.
What counts as a “good” CAGR?
Compare to benchmarks: S&P 500 ≈ 10 %, U.S. Treasuries ≈ 2 – 3 % (Federal Reserve, https://fred.stlouisfed.org). A higher return usually means higher risk.
Does CAGR account for inflation?
No. Subtract the average inflation rate to find real CAGR; U.S. CPI averaged 3.0 % since 1928 (BLS, https://www.bls.gov/cpi).
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