How this calculator works
CAGR is the constant annual rate that connects a starting value to an ending value over the supplied years. It assumes no deposits, withdrawals or other interim cash flows. Both values use the same currency and valuation basis. It smooths the path and does not show volatility or tax effects.
Formula
CAGR = (E/S)^(1/t) - 1, displayed as a percentage. S is a positive starting value, E is a nonnegative ending value and t is a positive number of years. If E = 0, CAGR = -100%.
Worked example
Growing from $10,000 to $15,000 over five years gives a CAGR of 8.447177%. Falling from $1,000 to $0 over three years gives -100%. The intermediate yearly returns do not need to be equal.
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Frequently asked questions
Can I use this after making contributions?
Additional contributions change the balance without being investment returns. This two-value model cannot separate them; use a cash-flow-based return method for that situation.
Is CAGR the average of yearly percentages?
It is a geometric annual rate. The arithmetic average of yearly returns can differ because gains and losses compound.
Can the result be negative?
Yes. A decline from the starting value gives a negative CAGR, and an ending value of zero gives exactly -100%.