What is a CAGR Calculator?
“Doubled in 5 years” and “up 60% in 3 years” cannot be compared directly. CAGR converts both to a single annual rate (14.9% vs 17.0%) so they can.
It is the geometric mean return: the smooth rate that would produce the same end value.
Frequently asked questions
What is the formula?
(Final ÷ Initial)^(1/years) − 1, shown as a percentage.
CAGR vs average annual return?
Arithmetic averages overstate: +50% then −50% “averages” 0% but loses 25%. CAGR reflects what actually happened to your money.
Does CAGR show volatility?
No: a smooth 12% and a wild ride ending at the same value have identical CAGR. It compresses the journey into the destination.
Can CAGR be negative?
Yes: an ending value below the start gives a negative rate.