Use this free CAGR calculator to find compound annual growth rate, 5-year CAGR, monthly growth equivalent, absolute return, and reverse CAGR scenarios.
Calculate the annualized growth rate of your investment.
0%
To calculate CAGR, divide ending value by beginning value, raise the result to 1 divided by the number of years, subtract 1, then multiply by 100. Example: ($25,000 / $10,000)^(1 / 5) - 1 = 20.11% CAGR.
CAGR = [(Ending Value / Beginning Value)^(1 / Years) - 1] x 100
Use CAGR when comparing investments, revenue growth, portfolio performance, or any return that happened over more than one year. For reverse CAGR projections, use the future value formula below; for a one-period gain, use the ROI Calculator.
GSC variants such as CAGR growth calculator, CAGR rate calculator, CAGR growth rate calculator, cumulative annual growth rate calculator, calculate compound annual growth rate, and calculate annual compound growth rate all point to this same annualized growth calculation.
A CAGR (Compound Annual Growth Rate) Calculator is a financial tool that measures the average, year-over-year growth rate of an investment over a specific period. Unlike a simple (absolute) return, which just tells you the total growth, CAGR gives you a "smoothed" annual rate, as if the investment had grown at a steady pace. This makes it one of the most accurate ways to compare the performance of different investments (like stocks, mutual funds, or real estate) over time.
The formula for CAGR looks complex, but it's just finding the average root of the total growth. Our calculator does the math for you, but here is the formula for a clear understanding:
CAGR = [ (Ending Value / Beginning Value) ^ (1 / N) ] - 1
The result is a decimal, which is multiplied by 100 to get the percentage you see in the calculator.
Let's say you invested in a mutual fund and want to calculate your investment growth:
Calculation:
1. Ending Value / Beginning Value = $25,000 / $10,000 = 2.5
2. (1 / N) = 1 / 5 = 0.2
3. (2.5) ^ (0.2) = 1.20112
4. 1.20112 - 1 = 0.20112
CAGR = 0.20112 × 100 = 20.11%
This means your $10,000 investment grew at a compound rate of 20.11% per year for 5 years to reach $25,000.
The Compound Annual Growth Rate is a core metric in finance. You can use this investment growth calculator to:
A "good" CAGR is highly relative and depends on the investment type, risk, and time period. There is no single "good" number, but here are some common benchmarks:
Ultimately, a "good" CAGR is one that meets or exceeds your personal financial goals for the level of risk you are willing to take.
Once you know a CAGR, you can flip the formula around to project what an investment will be worth in the future. This is called a reverse CAGR calculation:
Future Value = Present Value × (1 + CAGR)years
For example, if you invest $10,000 at an expected CAGR of 8% for 10 years, the future value is $10,000 × (1.08)10 = ~$21,589. To project monthly contributions instead of a single lump sum, use our SIP Calculator.
CAGR is yearly by convention, but the same idea works for any period. To convert an annual CAGR into an equivalent monthly growth rate, use:
Monthly rate = (1 + CAGR)1/12 − 1
So an 8% annual CAGR works out to about 0.643% per month - small per period, but enormously powerful over decades thanks to compounding.
When in doubt, prefer CAGR over a simple average. It's the single most honest one-number summary of a long-term return.
Absolute Return is the total percentage your investment grew from start to finish (e.g., $10k to $25k is a 150% absolute return). CAGR is the annualized rate that would have been required to get that same result. Our calculator shows both, and CAGR is the superior metric for comparison.
No. The standard CAGR formula assumes only a single starting value and a single ending value. It does not factor in adding or withdrawing money. For investments with regular contributions (like a 401k or SIP), you would need to use a different metric like XIRR (Extended Internal Rate of Return).
Yes. If your Ending Value is less than your Beginning Value, the calculator will show a negative CAGR, representing the average annual rate at which your investment lost value.
A simple 'average' can be misleading. If an investment goes up 50% (to $150) and then down 50% (to $75), the 'average' return is 0%. But in reality, you lost 25%. CAGR uses the compound (geometric) mean, which correctly shows a negative return in that scenario, making it far more accurate.
Use the standard CAGR formula with 5 as the number of years: CAGR = [(Ending Value / Beginning Value)(1 / 5) - 1] x 100. For $10,000 growing to $25,000 over 5 years, CAGR is 20.11%.
Yes. CAGR is annual by default, but you can convert it to a monthly equivalent with Monthly rate = (1 + CAGR)1/12 - 1. An 8% annual CAGR is about 0.643% per month.
Reverse CAGR uses an expected annual growth rate to project a future value. The formula is future value = present value × (1 + CAGR)years. For example, $10,000 at 8% CAGR for 10 years is about $21,589.
CAGR is a smoothed annual growth rate over multiple years. It is not each year's actual return; it shows the steady annual rate that would connect the beginning value and ending value over the full period.
Understanding your CAGR is the first step in analyzing your investment's past performance. To project its future, try our Compound Interest Calculator or our ROI Calculator to explore different financial scenarios.
Want the background and formulas behind this calculator? Read the companion guide.
Explore other PraxisCalc tools related to this topic.