📈 CAGR Calculator
Calculate the Compound Annual Growth Rate of any investment or business metric.
💰 Financial Disclaimer: This calculator provides estimates for educational purposes only and should not be considered professional financial, tax, or investment advice. Results may vary based on your individual circumstances. Consult a qualified financial professional for personal guidance.
CAGR Formula
CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) − 1
Example: Investment grows from $10,000 → $25,000 over 5 years:
CAGR = (25,000 ÷ 10,000)^(1÷5) − 1 = 20.11%
CAGR Benchmarks
| Asset Class | Typical CAGR | Rating |
|---|---|---|
| Savings Account | 0.5–2% | Safe, low return |
| Bonds | 2–4% | Conservative |
| S&P 500 (historical) | 7–10% | Good benchmark |
| Growth Stocks | 15–25% | Excellent |
| Venture Capital | 25%+ | High risk/reward |
Frequently Asked Questions
What is CAGR?
CAGR (Compound Annual Growth Rate) measures the mean annual growth rate of an investment over multiple years, assuming compounding. It's the single rate that takes you from start to end value.
What is a good CAGR?
For stocks: 7–10% matches the S&P 500 long-term average. 15–20% for individual stocks is excellent. For a business, 10–20% revenue CAGR annually is considered strong growth.
What is the CAGR formula?
CAGR = (Ending Value / Beginning Value)^(1/Years) − 1. An investment from $10K → $20K in 5 years: (20000/10000)^(0.2) − 1 = 14.87% CAGR.
Can CAGR be negative?
Yes. If your investment lost value, CAGR will be negative — showing the annual rate of loss. For example, $10K → $7K over 3 years = −11.1% CAGR.
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When to Use This Calculator
Use this when comparing investment returns, business revenue growth, or any metric that changes over multiple years. CAGR smooths out yearly volatility to give you a single, meaningful growth rate for the entire period.
Common Mistakes to Avoid
- Confusing CAGR with average annual return — CAGR is a geometric mean, not an arithmetic average; they give different results.
- Using it for periods under one year — CAGR is designed for multi-year analysis; use simple percentage change for short periods.
- Ignoring dividends or cash flows — CAGR of price alone misses total return for dividend-paying investments.