Investment Return (CAGR) Calculator
Turn any investment's start value, end value, and holding period into its true annualized growth rate.
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Annualized return (CAGR)
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Before fees, taxes, and inflation.
If this CAGR continued — projected future value
Projected value of your current $0 if the same CAGR continued.
| In | Projected value | Gain from today |
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How it works
CAGR answers: "at what steady yearly rate would my money have had to grow to get here?" The formula:
Where PV is the starting value and FV the ending value. Total gain is simply FV − PV, and total return is (FV − PV) ÷ PV × 100%.
Because CAGR smooths everything into one constant rate, it is the standard way to compare investments held for different lengths of time — a 50% gain over 2 years (22.5% CAGR) beats a 60% gain over 5 years (9.9% CAGR).
CAGR vs average return
A simple average of yearly returns is misleading whenever returns swing up and down. Say an investment rises +50% in year one and falls −50% in year two. The simple average of those two returns is 0% — yet if you started with $100 you'd have $150 after year one and only $75 after year two. The CAGR tells the truth: (75 ÷ 100)1/2 − 1 ≈ −13.4% per year. Whenever volatility is involved, CAGR — not the average — is the number that actually connects your start to your finish.
The rule of 72
A quick mental shortcut: 72 ÷ CAGR ≈ years to double your money. With the default example on this page (12.14% CAGR), 72 ÷ 12.14 ≈ 5.9 years — the exact doubling time, ln(2) ÷ ln(1.1214), is about 6.1 years, so the rule gets you within a few percent. It works best for rates between roughly 4% and 20%; for very low rates the exact formula is more accurate.
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Frequently asked questions
What is CAGR?
CAGR, the compound annual growth rate, is the steady yearly rate that would grow your starting amount into your ending amount. It smooths out volatility into one as-if-it-grew-evenly number.
How is CAGR different from average annual return?
A simple average of yearly returns overstates growth when returns swing up and down. CAGR accounts for compounding, so it is the accurate measure of multi-year performance.
Can CAGR be negative?
Yes. If you ended with less than you started, CAGR is negative and tells you the average yearly rate of loss. The total return percentage will be negative too.
Does CAGR include dividends?
Only if you include reinvested dividends in the final value. For stocks, use total return, price change plus dividends, as the final value for a complete picture.