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CAGR Calculator
Calculate the Compound Annual Growth Rate of your investments smoothly over a given time period.
Compound Annual Growth Rate
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0%
Absolute Return
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Total Profit
Formulas
- CAGR = [ (Final Value / Initial Value) ^ (1 / Years) ] - 1
- Final Value = Initial Value × (1 + CAGR) ^ Years
- Absolute Return = (Final Value - Initial Value) / Initial Value × 100
Examples
- Example 1: Invest $1,000. It grows to $2,000 in 5 years. CAGR = 14.87%. Absolute Return = 100%.
- Example 2: Invest $5,000 at a 10% CAGR for 10 years. Final Value = $12,968.
- Example 3: Doubling your money at 7% CAGR takes approximately 10.2 years (Rule of 72).
FAQ
What is a good CAGR?
It depends on the asset class. The stock market (S&P 500) historically returns about 8-10% CAGR.
What is the difference between Absolute Return and CAGR?
Absolute return measures the total growth regardless of time. CAGR smooths that growth out to an annualized percentage.
Does CAGR account for volatility?
No, CAGR assumes a steady growth rate every year, completely ignoring the wild swings that might have happened in between the initial and final dates.
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