CAGR Calculator
Find the steady yearly growth rate that turns your starting value into your ending value.
Initial Value
$100,000
Total Gain
$150,000
Final Value
$250,000
Final Value
$250,000
CAGR (per year)
20.11%
Absolute Return
150.00%
Growing from $100,000 to $250,000 over 5 years is the same as earning 20.11% every year, compounded.
Growth at CAGR
Yearly Breakdown
| Year | Initial Value | Total Gain | Value |
|---|---|---|---|
| 1 | $100,000 | $20,112 | $120,112 |
| 2 | $100,000 | $44,270 | $144,270 |
| 3 | $100,000 | $73,286 | $173,286 |
| 4 | $100,000 | $108,138 | $208,138 |
| 5 | $100,000 | $150,000 | $250,000 |
Frequently Asked Questions
1What is CAGR?
CAGR (Compound Annual Growth Rate) is the constant yearly rate at which an investment would have had to grow, with gains reinvested each year, to go from its starting value to its ending value over a given period.
2How is CAGR different from absolute return?
Absolute return is the total percentage gain over the whole period, regardless of how long it took. CAGR spreads that gain across the years as a compounded yearly rate, so investments held for different lengths of time can be compared fairly.
3Can CAGR be negative?
Yes. If the final value is lower than the initial value, the investment shrank, and CAGR shows the average yearly rate at which it lost value.
4When should I use XIRR instead of CAGR?
CAGR works for a single investment with one start value and one end value. If you invested or withdrew money at several different dates, such as a SIP, use XIRR, which accounts for the timing of every cash flow.
5Does CAGR show how smooth the returns were?
No. CAGR only depends on the start value, end value and duration. Two investments with the same CAGR can have had very different ups and downs along the way.
How the Numbers Are Calculated
CAGR is the single yearly growth rate that, compounded once a year, turns the initial value into the final value over the chosen number of years. The chart and table show how the value would have grown each year at that steady rate.
CAGR
CAGR = (FV / PV)^(1 / t) − 1
Absolute Return
Absolute Return = (FV − PV) / PV
Value after year n
Value = PV × (1 + CAGR)^n
- PV = initial value, FV = final value, t = duration in years.
- All figures are rounded only at the point they are displayed.