CAGR Calculator
"It went up 150%" tells you nothing until you know how long it took. Over three years that's excellent. Over twenty it's poor — worse than a fixed deposit.
CAGR fixes this. It converts any total gain into the smooth annual rate that would have produced it, so you can compare a stock held for 4 years against a fund held for 11 on the same scale. It's the only return figure worth quoting, and the one people quietly avoid when the honest answer is unflattering.
How it works
- 01CAGR = (Ending ÷ Beginning)^(1 ÷ years) − 1. It answers: what constant yearly rate would take me from here to there?
- 02The rate is smoothed by design. A fund that returned +50%, −30%, +40% has a CAGR that hides all that turbulence — useful for comparison, useless as a description of the ride.
- 03"Total gain" is the raw percentage change with no adjustment for time — shown alongside so you can see how differently the same investment reads on the two measures.
Frequently asked
CAGR or absolute return — which should I use?+
CAGR, whenever holding periods differ, which is almost always. Absolute return is only meaningful when you are comparing two things held for exactly the same period.
What is a good CAGR?+
Context decides. Beating inflation by a few points is a genuine win. Long-run broad equity indices have historically landed near 10–12% before tax. Anyone promising a guaranteed 30% CAGR is selling something you should walk away from.
Can CAGR be negative?+
Yes — if the ending value is lower than the starting value. A negative CAGR is simply the annualised rate at which the investment lost ground.
Why does CAGR not match my actual experience?+
Because it assumes one investment at the start and no additions. If you invested in instalments, CAGR overstates or understates what you actually earned — for that case you need XIRR, which weights each cash flow by when it happened.