CAGR Calculator
Calculate Compound Annual Growth Rate for investments
About this calculator
The CAGR Calculator determines the Compound Annual Growth Rate of your investments, showing the annual rate of return needed for an investment to grow from its beginning balance to its ending balance over a specific time period. This metric smooths out volatility and provides a clear picture of an investment's performance, making it essential for comparing different investments, evaluating portfolio performance, and making informed financial decisions. CAGR is particularly valuable for long-term investment planning and assessing the effectiveness of your investment strategy.
How to use
Enter your initial investment amount, final investment value, and the time period in years. The calculator will instantly compute your CAGR percentage, showing the annualized growth rate of your investment. Use this rate to compare performance across different investments or time periods.
Frequently asked questions
What is a good CAGR percentage?
A good CAGR varies by asset class. Stock markets historically average 7-10% annually, while bonds typically yield 2-5%. Higher rates indicate better performance.
How is CAGR different from average return?
CAGR accounts for compounding effects and smooths volatility, while average return simply divides total returns by years. CAGR provides more accurate long-term performance measurement.
Can CAGR be negative?
Yes, CAGR can be negative when your final investment value is less than the initial amount, indicating an annual loss rate over the period.