Financial Calculation Summary • Investing
CAGR Calculator
Calculate Compound Annual Growth Rate for investments.
Prepared on
For informational & planning purposes
CAGR Calculator
Calculate Compound Annual Growth Rate for investments.
- CAGR
- growth rate
- investment
- returns
Annual Growth Rate
100.00% Total Return
After 5 Years
Key Takeaway: Asset Value increases from $10,000 (Year 0) to $20,000 (Year 5), a net change of +$10,000 (+100.0%).
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Guide
How to read this calculator
- 1Save your calculations by bookmarking this page with your inputs in the URL.
- 2Try different scenarios to understand how changes affect your results.
- 3Share this calculator with friends or family who might find it useful.
- 4Use the results as a starting point for conversations with financial advisors.
- 5Bookmark this page and revisit quarterly to track your progress toward goals.
Compound annual growth rate is CAGR = (Ending value / Beginning value)^(1/n) − 1. n is the number of years. CAGR is the constant yearly rate that links the two values. It is not the average of each year’s return.
Step-by-Step Instructions
Enter the beginning value and the ending value for the same investment.
Enter the number of years between those two values.
Read CAGR as an annualized rate. A lumpy path and a smooth path can share the same CAGR.
When measuring investment performance over time.
- •Investors
- •Financial analysts
- •Portfolio managers
CAGR summarizes the whole period as one annual rate.
What Each Result Means
CAGR
The constant annual rate from the start value to the end value.
Interpretation: Use it to compare investments held for different lengths of time. Do not use it as the typical one-year result.
What to Do With Your Results
Compare CAGR, not total percent gain. Total gain rewards the longer holding period.
- • CAGR ignores the path. Two investments with the same CAGR can have very different drawdowns.
- • Money added or withdrawn during the period breaks the formula. Use a money-weighted return instead.
- • It does not subtract inflation or taxes.
Alex
Looking to optimize their financial strategy using the Cagr.
The Challenge
Alex needs to understand the long-term impact of their decisions regarding Cagr.
Starting Values
Calculation Breakdown
Input initial parameters into the calculator.
Initial setup complete.
Analyze the projected outcomes.
Strategic insight gained.
Results
Total Benefit
$15,000
Projected over 10 years.
Key Insights
- Early planning leads to better financial outcomes.
- Small changes in inputs can have large long-term effects.
Still have questions? Check our financial glossary for definitions or explore our learning resources.