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CAGR Calculator

Determine the Compounded Annual Growth Rate of your investments.

CAGR %

15%

Absolute Return

100.0%

Growth Multiple

2.00x

Numbers are a starting point. Judgement is the rest.

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For illustration only. Returns are assumptions, not guarantees. This is not investment advice.

What is CAGR and how do you calculate it?

Compounded Annual Growth Rate (CAGR) is the rate at which an investment grows annually over a specific period, assuming the profits are reinvested each year. Unlike absolute returns, CAGR provides a smoothed annual rate that accounts for the effects of compounding, making it the gold standard for comparing different investments.

The formula is CAGR = [(Final Value / Initial Value)^(1 / Years)] - 1. While absolute returns might look impressive over long periods, CAGR tells you the real efficiency of your capital. It is particularly useful for evaluating equity portfolios or business growth where returns fluctuate year-to-year.

A calculator estimates; an advisor accounts for your taxes, existing assets, and risk.

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