CAGR & Investment Return Calculator
Turn a starting value, an ending value and a number of years into your compound annual growth rate — the one smoothed yearly return that lets you compare any two investments fairly. Any currency, any market.
CAGR is the single smoothed annual rate that would take your initial value to your final value over the period — it assumes reinvestment and ignores how bumpy the ride actually was.
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How CAGR is calculated
- Divide your final value by your initial value to get the growth multiple.
- Raise that multiple to the power of 1 ÷ number of years to annualize it.
- Subtract 1 and multiply by 100 to express it as a percentage — that's your CAGR.
- Total return = (final ÷ initial − 1) × 100, and absolute gain = final − initial.
Run the numbers
An investment grows from $1,000 to $2,000 over 5 years. The growth multiple is 2, so CAGR = 2^(1/5) − 1 = 14.87% per year. The total return over the whole period is +100%, and the absolute gain is $1,000. Compounding 14.87% for five years lands you right back at a doubling — that's the number the calculator returns.
CAGR is powerful because it makes different holding periods comparable: a 100% gain over 5 years and a 100% gain over 10 years are very different annual rates. It does smooth over the bumps, though — two investments with the same CAGR can feel completely different to hold. Treat it as a summary of the past, never a forecast of the future.
Frequently asked questions
What is CAGR (compound annual growth rate)?
CAGR is the single, smoothed annual rate that would grow your initial value into your final value over a period, assuming the growth compounds each year. It answers 'what steady yearly return would have produced this result?' — even if the actual year-to-year returns were bumpy.
How is CAGR calculated?
CAGR = (final value ÷ initial value) raised to the power of (1 ÷ number of years), minus 1, expressed as a percentage. Example: $1,000 growing to $2,000 over 5 years is 2^(1/5) − 1 = 0.1487, or about 14.87% per year.
What's the difference between CAGR and total return?
Total return is the whole gain over the entire period — $1,000 to $2,000 is a +100% total return. CAGR spreads that same result across the years as an annual rate — here about 14.87% per year. Total return tells you how much you made; CAGR tells you how fast, so you can compare investments held for different lengths of time.
Does a high CAGR mean an investment is good?
Not on its own. CAGR ignores how volatile the ride was, any contributions or withdrawals along the way, and the risk taken to earn it. It's a clean way to compare historical results, but past performance never guarantees future returns. Use it as one input, not a verdict.
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Educational tool only — not financial advice, and no promise of any return. Past performance does not guarantee future results. See more free tools.