CAGR Calculator

Calculate the Compound Annual Growth Rate (CAGR) of any investment. Enter your initial value, final value, and time period to see your annualized return — with a live animated breakdown.

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CAGR Calculator

Compound Annual Growth Rate — annualized investment return

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Compound Annual Growth Rate
Absolute Return
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What is CAGR and How Is It Calculated?

CAGR — Compound Annual Growth Rate — is the single most useful metric for comparing investment returns across different time periods. Unlike a simple percentage gain, CAGR normalizes your return into an equivalent annualized rate, so you can directly compare a 5-year stock return against a 10-year real estate investment. The formula is: CAGR = (Final Value / Initial Value)^(1/Years) − 1. For example, $10,000 growing to $50,000 over 5 years gives a CAGR of 37.97% — meaning the investment effectively compounded at 37.97% each year. This is the figure mutual funds, ETFs, and investment platforms are required by the SEC to report.

CAGR is also essential for evaluating business revenue growth, evaluating portfolio benchmarks, and back-testing investment strategies. The S&P 500's 10-year CAGR through early 2026 is approximately 12.8% (or ~9.8% inflation-adjusted). When comparing funds, always check the 3-, 5-, and 10-year CAGR together — a fund with a great 1-year return but mediocre 5-year CAGR may have gotten lucky. Rule of 72: divide 72 by your CAGR to find how many years it takes to double your money. At 10% CAGR, money doubles roughly every 7.2 years.

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CAGR Formula

CAGR = (Final ÷ Initial)^(1÷Years) − 1. Multiply by 100 for the percentage. Works for any asset class: stocks, real estate, savings, business revenue, or crypto.

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Rule of 72

Divide 72 by your CAGR % to estimate years to double. At 8% CAGR → 9 years. At 12% → 6 years. At 6% → 12 years. A quick mental shortcut that's accurate within ±1 year for rates between 4%–20%.

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CAGR vs ROI

ROI (total return) doesn't account for time. A 100% ROI over 2 years vs 10 years are wildly different performances. CAGR annualizes both so you can compare apples to apples across holding periods.

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Benchmark CAGR Rates

S&P 500 10-yr CAGR: ~12.8% (2026). Real estate (national avg): 4%–7%. High-yield savings: 4.5%–5%. A good investment CAGR beats your risk-free alternative (T-bills currently ~4.3%).

Frequently Asked Questions

CAGR (Compound Annual Growth Rate) is the annualized rate at which an investment grows from its initial value to its final value over a set number of years. Formula: CAGR = (Final Value / Initial Value)^(1/Years) − 1. Example: $10,000 growing to $50,000 over 5 years → CAGR = (50,000/10,000)^(1/5) − 1 = 37.97%. This means the investment effectively compounded at 37.97% per year.
Benchmark CAGR rates as of 2026: S&P 500 10-year CAGR ≈ 12.8% (nominal), ≈ 9.8% inflation-adjusted. Real estate (national average): 4%–7%. High-yield savings: 4.5%–5%. T-bills (risk-free): ~4.3%. A good CAGR exceeds your risk-free alternative. For equity investments, beating the S&P 500's long-run 10% average is considered strong performance.
Absolute return measures total percentage gain regardless of time: (Final − Initial) / Initial × 100. CAGR annualizes that gain for fair comparison across different holding periods. Example: a 100% absolute return over 10 years = 7.18% CAGR. The same 100% over 2 years = 41.42% CAGR. Always use CAGR when comparing investments held for different durations.
The Rule of 72 is a shortcut: divide 72 by your CAGR % to estimate how many years it takes to double your money. At 8% CAGR → 9 years. At 12% → 6 years. At 6% → 12 years. The rule is accurate within ±1 year for rates between 4%–20%. It works in reverse: if you want to double money in 7 years, you need roughly 72/7 = 10.3% CAGR.
Yes. A negative CAGR indicates an investment lost value over the holding period. If $10,000 fell to $7,000 over 3 years, CAGR = (7,000/10,000)^(1/3) − 1 = −11.0% per year. This is common in stocks during bear markets, commodities, or failing businesses. The calculator handles negative CAGR automatically and flags it as a loss.

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