CAGR

Total growth
Growth multiple
Absolute gain

How it works

CAGR smooths an investment’s journey into one constant annual rate. It ignores everything that happened in between — the volatility, the drawdowns, the good year that rescued three bad ones — and reports only the rate that would have produced the same result in a straight line.

That smoothing is the point and also the limitation. It is the right measure for comparing two investments over the same period, and the wrong one for describing how bumpy the ride was.

CAGR = (End ÷ Start)^(1 ÷ years) − 1

  • Start — the value at the beginning of the period
  • End — the value at the end
  • years — the length of the period, which may be fractional

Worked example

An investment growing from 100,000 to 260,000 over 7 years

Inputs

Start value100,000
End value260,000
Period7 years

Results

CAGR14.6%
Total growth160.0%
Growth multiple2.60×

A 160% total gain sounds better than 14.6% a year, but they describe exactly the same result. Always check which one is being quoted.

Frequently asked questions

What is the difference between CAGR and average return?

An arithmetic average overstates growth whenever returns vary. Up 50% then down 50% averages zero, but you have actually lost 25% — and CAGR correctly reports −13.4% a year. Use CAGR for anything compounding.

Can CAGR be negative?

Yes. If the end value is below the start value, CAGR is the annual rate of decline. The calculator reports it as a negative percentage rather than hiding it.

Does CAGR work if I added money along the way?

No — it assumes a single amount left untouched. Use the XIRR calculator when there are contributions or withdrawals, because their timing changes the answer.

Is my data sent anywhere?

No. The calculation runs entirely in your browser. Nothing you type is transmitted to us or stored.

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