CAGR Calculator
Calculate the real compound annual growth rate of any investment. Cuts through the noise of raw returns.
Inputs
How to Calculate CAGR (Compound Annual Growth Rate)
CAGR strips away the noise of volatile returns to show you the smooth, annualized growth rate of any investment. If your portfolio went from $10,000 to $25,000 over 5 years, CAGR tells you the equivalent steady annual return that would produce the same result.
Enter your beginning value, ending value, and the number of years. The calculator returns the CAGR and shows a growth chart. Unlike simple average returns (which lie), CAGR accounts for compounding and gives you a single, honest number.
Use CAGR to compare investments on equal footing. A stock that returned 100% in year one and -50% in year two has a 0% CAGR — not 25% like a simple average would suggest. CAGR tells the truth.
Formula
CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) − 1
Example
You invested $10,000 in an index fund. After 7 years, it's worth $22,000.
CAGR = ($22,000 ÷ $10,000)^(1/7) − 1 = 2.2^0.1429 − 1 = 11.9% per year.
This means a steady 11.9% annual return would have produced the same result — even though actual yearly returns bounced between -15% and +30%.
Frequently Asked Questions
What is a good CAGR for a trading account?
The S&P 500 has a historical CAGR of about 10% including dividends. Active traders who consistently beat that are outperforming. Top hedge funds target 15-25% CAGR. A day trading account with 30%+ CAGR is elite — but comes with higher risk and drawdowns.
What's the difference between CAGR and average annual return?
Average annual return adds up yearly returns and divides by the number of years — it ignores compounding and overstates actual performance. CAGR accounts for compounding. If you gain 100% then lose 50%, your average return is 25% but your CAGR is 0% (you're back where you started).
Can CAGR be negative?
Yes. If your ending value is less than your beginning value, CAGR will be negative. A $10,000 investment that dropped to $7,000 over 3 years has a CAGR of -11.2%. Negative CAGR means the investment lost money on an annualized basis.
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Disclaimer: This calculator is for educational purposes only and does not constitute financial advice. Trading involves substantial risk of loss. Past performance does not guarantee future results. Always do your own research and consult with a licensed financial advisor before making investment decisions.