CAGR Calculator
Use this CAGR calculator to find the compound annual growth rate between a starting and ending value, and project it forward.
Understanding the CAGR Calculator
CAGR — compound annual growth rate — answers a specific question: if a value grew at a single, steady rate every year, what would that rate have to be to get from where it started to where it ended? It smooths out the bumpy year-to-year path into one comparable number.
That’s different from total growth, which just measures the overall percentage change with no regard for how long it took. A 150% total gain over 8 years and a 150% gain over 2 years are very different achievements — CAGR captures that difference, while total growth treats them the same.
CAGR is a smoothing calculation, not a description of what actually happened along the way. Real investments rarely grow in a straight compounding line — they go up and down — so CAGR is best used for comparing the overall pace of two investments or time periods, not for predicting next year’s return.
CAGR Calculator Examples
Example 1 — Long time horizon
Example 2 — Short time horizon
CAGR Calculator FAQ
A simple average adds up each year’s return and divides by the number of years, which can overstate growth when returns are volatile. CAGR instead measures the single steady rate that actually connects the start and end values, accounting for compounding.
No — ROI (return on investment) typically expresses total gain as a single percentage with no time dimension, while CAGR annualizes that gain over a specific number of years. Two investments can have the same ROI but very different CAGRs if they took different amounts of time.
Yes — if the ending value is lower than the beginning value, CAGR will be negative, representing the steady annual rate of decline that connects the two points.
No — this calculation assumes the beginning value grew untouched to the ending value. If you added or withdrew money during the period, CAGR based only on the start and end figures won’t accurately reflect your actual investment performance.
Total growth doesn’t account for time, so it can’t fairly compare investments held for different lengths. CAGR puts everything on an annual basis, making it possible to compare a 2-year investment against a 10-year one on equal footing.
Generally, but not in isolation — a higher CAGR often comes with higher volatility or risk along the way. Two investments with the same CAGR can have had very different, and very different feeling, paths to get there.
You can project forward assuming the same rate continues, which is what the “project forward” field does here — but treat it as a scenario, not a forecast, since past growth rates are no guarantee of future ones.