CAGR Calculator: Compound Annual Growth Rate
CAGR tells you the steady yearly rate at which an investment would have grown from its starting value to its ending value. It is the fairest way to compare returns over different periods.
Embed this calculator on your website — free
Paste this code into any web page, WordPress “Custom HTML” block or Blogger post. Please keep the credit link.
The CAGR Formula
Example: An investment grows from 10,000 to 25,000 in 5 years. (25,000 ÷ 10,000)^(1 ÷ 5) − 1 = 20.11% a year. The total return is 150%, but that number alone hides how long it took.
How Fast Money Grows at Each CAGR
The CAGR needed to multiply your money:
| Growth | In 3 years | In 5 years | In 10 years | In 20 years |
|---|---|---|---|---|
| 1.5× | 14.47% | 8.45% | 4.14% | 2.05% |
| 2× (double) | 25.99% | 14.87% | 7.18% | 3.53% |
| 3× | 44.22% | 24.57% | 11.61% | 5.65% |
| 5× | 71.00% | 37.97% | 17.46% | 8.38% |
| 10× | 115.44% | 58.49% | 25.89% | 12.20% |
CAGR vs Average Annual Return
A simple average of yearly returns can be very misleading. If an investment rises 50% one year and falls 50% the next, the average return is 0% — but 100 becomes 150 and then 75, a real loss. The CAGR is -13.40%, which reflects what actually happened.
That is why fund factsheets and company reports quote CAGR rather than an average.
When CAGR Is Not Enough
- Regular investments (SIPs): CAGR assumes one investment at the start. For money added over time, use XIRR instead.
- Volatility: CAGR smooths out the ups and downs, so two investments with the same CAGR can carry very different risk.
- Business growth: CAGR is also used for revenue, users or sales — just enter the first and last year’s figures.
Frequently Asked Questions
What is a good CAGR?
It depends on the asset and the risk. Over long periods, broad stock markets have often delivered roughly 10–12% a year, while fixed deposits and bonds return less with lower risk.
How is CAGR different from ROI?
ROI is the total percentage gain over the whole period. CAGR converts that into a steady yearly rate, so investments held for different lengths of time can be compared fairly.
Can CAGR be negative?
Yes. If the ending value is lower than the beginning value, the CAGR is negative, showing the average yearly loss.
How do I calculate CAGR in Excel?
Use =(End/Start)^(1/Years)-1, or the RRI function: =RRI(Years, Start, End).