CAGR calculator (compound annual growth rate)
Calculate the compound annual growth rate (CAGR) of an investment between two values.
CAGR is the constant rate that would take the initial to the final value over the period — it smooths ups and downs.
How the calculation works
CAGR (compound annual growth rate) answers: "how much did this grow per year, on average, as if compounded?". It compares investments over different periods on a fair basis.
CAGR = (final ÷ initial)^(1 ÷ years) − 1
It spreads the total gain evenly across the years, ignoring mid-path volatility.
Step-by-step example
R$10,000 became R$16,000 in 4 years:
- Ratio: 16,000 ÷ 10,000 = 1.6
- CAGR: 1.6^(1/4) − 1 = 12.47%/yr
Why not a simple average
If an asset rises 100% then falls 50%, the "average" looks like +25% — but you broke even (100 → 200 → 100). CAGR captures this correctly: 0%/yr.
Examples
- R$10,000 → R$16,000 in 4 years: CAGR ≈ 12.47%/yr.
- Doubling in 6 years: CAGR = 2^(1/6) − 1 ≈ 12.2%/yr.
Frequently asked questions
Is CAGR the same as total return?
No. CAGR is annualized; total return is the cumulative gain over the whole period.
CAGR vs ROI?
ROI is the total gain regardless of time; CAGR turns it into a yearly rate, so it compares different periods.
Does CAGR mean it earned that every year?
No. It is a smoothed average. The real path may have had great and terrible years — CAGR only reflects start and end.
Why not use the simple average of returns?
Because returns compound. Up 100% then down 50% averages +25% arithmetically but leaves you flat; CAGR correctly shows 0%.
Does CAGR work if I made contributions?
No. It only uses start and end values. With contributions, use IRR instead.
What does CAGR hide?
Volatility. Two investments with the same 10% CAGR can have wildly different paths. It is also sensitive to the chosen window.
Related calculators
Compound interest
See how your money grows over time with monthly contributions and an evolution chart.
ROI (return on investment)
Calculate the return on investment (ROI) and profit from the amount invested and the amount returned.
Rule of 72
Find out how long an investment takes to double, triple or quadruple at a given interest rate.
More Finance calculators
See all →Simple interest
Calculate simple interest and the final amount from principal, rate and time.
Loan (SAC and Price)
Simulate the installments of a mortgage or car loan in the SAC and Price systems.
Profit margin
Calculate profit, profit margin and markup from cost and selling price.
APY (effective rate)
Convert a nominal annual rate into the effective yield (APY) based on the compounding frequency.
Interest rate converter
Convert equivalent rates between day, month and year under compound interest. Example: 1% a month equals 12.68% a year — not the 12% you would expect.
Present value
Find out how much to invest today to reach a future amount, given the rate and term.
Freelance hourly rate
Find out how much to charge per hour from your monthly income goal and the hours you work.
50/30/20 budget
Split your monthly income by the 50/30/20 rule: needs, wants and savings/debt.
Updated on June 18, 2026 · by Rafael Rossi · Methodology & sources