CAGR Calculator (Compound Annual Growth Rate)
What this tool does: calculates the compound annual growth rate between a
starting value and an ending value over a given number of years. This is a way to express
overall growth as a smoothed annual percentage.
Enter your numbers
This tool assumes a smooth growth path and does not show year-to-year volatility. It is most useful for summarising past performance, not predicting future returns.
How CAGR fits into the bigger picture
CAGR is a useful way to summarise past performance and compare investments over different time periods. It connects naturally with the ideas on:
- Risk, Return and Diversification for thinking about the trade-offs behind different return profiles.
- Asset Allocation for deciding how much risk you are willing to take in pursuit of higher expected returns.
- Investing 101 for building a plan that focuses on long-term averages rather than short-term noise.
Remember that two investments can have the same CAGR but very different paths along the way. Volatility and drawdowns still matter, especially when you are adding or withdrawing money over time.