CAGR Calculator

CAGR (Compound Annual Growth Rate) measures the mean annual growth rate of an investment over time, accounting for compounding. Unlike simple average returns, CAGR reflects the actual rate of return that would be required to grow from the starting value to the ending value. For example, an investment that goes up 50% then down 50% has a 0% average return but a -13.4% CAGR — showing you actually lost money. CAGR is always the correct metric for comparing investments or tracking performance over multiple years.

Yes, CAGR is negative when the ending value is less than the starting value. This indicates an annualized loss rather than growth. For example, if $10,000 shrinks to$8,000 over 2 years, the CAGR is approximately -10.6% per year. The calculator handles negative growth correctly and will still compute doubling time (which becomes "recovery time" in this context — how long to get back to break-even at the current rate).

Enter your total annual contribution amount in the "Annual Contribution" field. For monthly contributions, multiply by 12. The calculator assumes contributions are made in equal annual amounts. For more precise monthly modeling, you would need a more complex IRR (Internal Rate of Return) calculation, but for most planning purposes, annualizing your contributions provides sufficient accuracy.

CAGR assumes a single starting investment with no intermediate cash flows. IRR (Internal Rate of Return) handles multiple irregular cash flows at different times. Use CAGR for simple "lump sum to final value" calculations. Use IRR when you have ongoing contributions, withdrawals, or varying cash flow timing. This calculator bridges both by offering a contributions mode that approximates IRR for regular annual additions.

Common reasons for discrepancy include: (1) Your broker may show time-weighted returns vs. your money-weighted actual experience, (2) Dividends or interest may be treated differently, (3) Fees and taxes might be excluded from one calculation, (4) Different date ranges or rounding conventions. The CAGR calculator shows the pure mathematical growth rate between two values — verify you're using the same start/end dates and whether your broker includes distributions in their calculation.

The Rule of 72 provides a quick mental estimate: divide 72 by your CAGR percentage to approximate doubling time. It works best for rates between 6% and 10%. At 8%, the rule gives 9 years (72÷8) while the exact calculation gives 9.01 years — remarkably close. At very low rates (2%) or high rates (20%), the rule becomes less precise. The calculator shows both the exact doubling time and the Rule of 72 estimate so you can see the difference.

Absolutely. CAGR is universal for any metric that grows over time. Founders use it for revenue CAGR, user growth CAGR, market share expansion, or any KPI. The same formula applies whether you're measuring dollars, customers, or website traffic. Just ensure your start and end values represent the same metric measured consistently.

For retirement accounts or long-held investments, estimate using your best records. If you made multiple purchases, calculate a weighted average cost basis. For truly unknown starting points, you cannot calculate true CAGR — you can only calculate growth from the earliest known value, which becomes your practical starting point.

The calculator handles any time period automatically. For periods under one year, be cautious — annualizing short-term returns can be misleading due to volatility. The SEC mandates specific rules for annualizing returns in marketing materials. For personal use, simply enter your actual days/months/years and let the calculator annualize it properly using the exact time period.

With contributions enabled, the calculated CAGR is a solved rate that makes the equation balance. Small rounding in displayed percentages (showing 12.34% instead of 12.3427%) can cause minor discrepancies in the final year. The exact CAGR used for the table maintains full precision internally. For the cleanest results, use the "Copy CSV" feature which exports full-precision values.

In common usage, yes. Technically, "annualized return" can refer to any method of converting a return to an annual figure, while CAGR specifically uses geometric compounding. Some contexts distinguish them: Simple Annualized Return = (Total Return ÷ Years), which ignores compounding. Always verify which method is being used when comparing figures from different sources. This calculator uses geometric CAGR exclusively.

Yes, though interpretation requires care. CAGR smooths volatility into a single steady rate, which can obscure the extreme swings crypto experiences. A Bitcoin position held 2019-2024 shows an impressive CAGR, but the path included multiple 50%+ drawdowns. Use CAGR for long-term trend assessment, not for understanding risk or typical year-to-year experience. Always pair CAGR analysis with volatility metrics for complete picture.

This determines when your annual contribution is added relative to growth calculation. Start-of-year means your contribution earns the full year's growth; end-of-year means it sits idle until next year. The difference is meaningful over long periods: $10,000 annual contributions at 10$630,000 with start-of-year timing vs ~$573,000 with end-of-year — nearly$57,000 difference from timing alone. Choose based on your actual behavior (monthly DCA approximates end-of-year; lump sum January investment is start-of-year).