Calculate the Compound Annual Growth Rate of an investment.
Example Result
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The calculated result will appear here after you press Calculate.
Estimates for planning only; not financial, tax or investment advice. See our Disclaimer.
Compound Annual Growth Rate, or CAGR, is the standard way investors express how fast an investment grew each year on average, smoothing out the ups and downs along the way. This calculator takes a beginning value, an ending value, and the number of years between them to compute the single steady annual growth rate that would take you from start to finish. CAGR is widely used to compare mutual funds, stocks, business revenue growth, or any metric that changes over multiple years, because it strips away volatility and gives one clean, comparable number. Use it when evaluating investment performance over multi-year periods, comparing two different assets with different holding periods, or projecting future growth based on historical trends.
Enter the investment's beginning value.
Enter its ending value.
Enter the number of years between them, then press Calculate.
FlowUtil computes the Compound Annual Growth Rate with (Ending ÷ Beginning)^(1/years) − 1, the standard formula that finds the single steady annual growth rate carrying the beginning value to the ending value over the period. A portfolio that went from $10,000 to $18,000 over five years has a CAGR of about 12.47%, meaning it grew as if it returned 12.47% every year with full reinvestment — even if the actual yearly returns were volatile.
CAGR is the same geometric calculation as the annualised return in the Investment Return Calculator; the two tools share the formula. CAGR is the purpose-built tool when you specifically want the smoothed annual rate and always have a holding period, while the Investment Return Calculator additionally reports the total return and works without a time input. CAGR deliberately ignores the path between the start and end values — it cannot tell you whether the investment rose steadily, crashed and recovered, or sat flat then spiked. For any decision where volatility or drawdown matters, supplement CAGR with the year-by-year data rather than relying on the smoothed number alone.
| Symbol | Meaning |
|---|---|
| CAGR | Compound annual growth rate — the smoothed yearly growth rate |
| Beginning | Value of the investment at the start of the period |
| Ending | Value of the investment at the end of the period |
| years | Number of years between the beginning and ending values |
1Beginning $10,000, Ending $18,000, 5 years.
CAGR = (18,000/10,000)^(1/5) − 1 = 1.8^0.2 − 1
CAGR = 12.47% · Total Growth = 80.00% · Gain = $8,000
An 80% total gain over five years equates to a 12.47% compound annual rate. The same 80% spread over ten years would be only 6.05% CAGR — the period matters as much as the gain when expressing growth as a rate.
2Beginning $2,000, Ending $6,000, 10 years.
CAGR = (6,000/2,000)^(1/10) − 1 = 3^0.1 − 1
CAGR = 11.61% · Total Growth = 200.00% · Gain = $4,000
A tripling over a decade is an 11.61% CAGR. Note that a 200% total return does not mean 20% per year — simple averaging would overstate the true compounded annual rate by ignoring reinvestment.
3Beginning $50,000, Ending $42,000, 4 years.
CAGR = (42,000/50,000)^(1/4) − 1 = 0.84^0.25 − 1
CAGR ≈ −4.27% · Total Growth = −16.00% · Loss = $8,000
CAGR can be negative: a 16% decline over four years is a −4.36% compound annual rate, the steady yearly loss that would produce the same ending value. This lets you compare a losing holding against the opportunity cost of a positive-return alternative.
CAGR is a single annualised percentage that describes the smoothed growth from beginning to ending value. It is the standard way to compare investments, funds, or business metrics over multi-year periods because it normalises for different time spans — a 12% CAGR over five years and a 12% CAGR over fifteen years are directly comparable as annual rates, even though the total gains differ enormously.
CAGR intentionally discards the path between the endpoints. Two investments with identical 10% CAGR can have very different risk profiles: one may have risen steadily, while the other halved in year two and then tripled. If you would have panicked and sold during the drawdown, the smooth 10% figure is misleading for your real outcome. Always pair CAGR with a measure of volatility or the actual yearly returns when risk matters.
CAGR assumes reinvestment of all gains at the same rate and a constant holding period. It does not account for cash you added or withdrew mid-period (which distorts it the same way it distorts total return), for taxes and fees (which reduce the realised rate), or for inflation (use the Inflation Adjusted Return Calculator to convert a nominal CAGR into a real one). It is a descriptive statistic of past growth, not a forecast of future returns.
Where a smoothed annual growth rate answers a real comparison question.