CAGR Calculator

Calculate compound annual growth rate, project future investment value, compare against benchmarks like the S&P 500, and visualize growth with interactive charts.

📈 Investment Values

📊 Benchmark Comparison (optional)


💰 Growth Projection

📊 Benchmark Comparison (optional)


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How the CAGR Calculator Works

This calculator helps investors and business owners measure growth performance using the Compound Annual Growth Rate — the gold standard metric for comparing investments across different time periods.

The CAGR Formula

CAGR is calculated as: CAGR = (Ending Value / Beginning Value)1/n − 1, where n is the number of years. Unlike simple average returns, CAGR accounts for compounding and gives you the true geometric growth rate.

Calculate CAGR Mode

Enter your beginning investment value, ending value, and time period. The calculator instantly shows your CAGR percentage, total growth, absolute gain, and a year-by-year growth table showing how your investment compounded over time.

Future Value Mode

Project how much your investment will be worth in the future. Enter your starting amount, expected CAGR, and time horizon to see projected ending value, total growth, and a detailed year-by-year projection.

Benchmark Comparison

Compare your investment's performance against a benchmark like the S&P 500 (~10% CAGR historically). The chart and table overlay both growth curves so you can see if you're outperforming or underperforming the market.

When to Use CAGR

CAGR Limitations

CAGR is a smoothed measure — it doesn't show volatility, drawdowns, or year-to-year variation. Two investments with identical CAGRs can have vastly different risk profiles. Always consider CAGR alongside other metrics like standard deviation, Sharpe ratio, and maximum drawdown.

Frequently Asked Questions

What is CAGR?
CAGR (Compound Annual Growth Rate) is the average annual growth rate of an investment over a period longer than one year. It smooths out volatility to show the steady rate at which an investment would have grown if it grew at a constant rate each year.
How is CAGR calculated?
CAGR = (Ending Value / Beginning Value)^(1/Years) − 1. For example, an investment growing from $10,000 to $25,000 over 5 years has a CAGR of (25000/10000)^(1/5) − 1 = 20.11%.
What is a good CAGR for investments?
The S&P 500 has historically returned about 10% CAGR (7% after inflation). A "good" CAGR depends on the asset class: 15–25% is excellent for stocks, 3–5% is typical for bonds, and 7–12% is common for real estate.
What is the difference between CAGR and average return?
Average return is a simple arithmetic mean of yearly returns, while CAGR accounts for compounding. CAGR is always equal to or lower than the arithmetic average because it reflects the geometric mean, which accounts for volatility drag.
Can CAGR be negative?
Yes. If the ending value is less than the beginning value, CAGR will be negative, indicating the investment lost value on average each year. For example, going from $10,000 to $7,000 over 3 years gives a CAGR of −11.27%.
Why doesn't CAGR show risk?
CAGR only shows the smoothed average growth rate — it hides year-to-year volatility. Two investments can have the same CAGR but very different risk profiles. Always consider standard deviation or maximum drawdown alongside CAGR.
How do I use CAGR for financial planning?
Use CAGR to project future portfolio values, compare investment performance across different time periods, set realistic growth expectations, and evaluate whether a business or investment is meeting its targets.

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Methodology, Assumptions, and Limitations

About this page: CAGR Calculator — Compound Annual Growth Rate is designed to help visitors make faster, better-informed decisions without creating an account or giving up personal data.

This tool assumes constant contribution patterns, return rates, and timing conventions based on the values you enter. Real market returns are volatile, taxes vary, and sequence-of-returns risk can materially change outcomes.

Worked example: Example: run a conservative return assumption beside a more optimistic one so you can see how sensitive the ending balance is to small rate changes.

Source References

Editorial Transparency

Last updated: March 9, 2026 · Author: CalcSharp Editorial Team · Reviewed by: CalcSharp Finance Review Desk

CalcSharp publishes free educational calculators and guides. We prioritize plain-English explanations, visible assumptions, and links to primary or official references wherever practical.

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