CAGR Calculator
The CAGR calculator works out the compound annual growth rate — the annualized return — between a beginning value and an ending value over a set period. Enter your starting balance, your final balance, and how long the money was held, and it instantly shows the annual growth rate plus the total cumulative return. It's a lump-sum calculator that runs entirely in your browser: nothing is uploaded, and there's no account or signup.
Enter your beginning value, ending value, and how long the money was held above, then pick Years or Months for the duration. The annualized return (CAGR) and the total cumulative return update instantly as you type — no calculate button.
Ready to find your annualized return? It takes three numbers.
Use the free CAGR Calculator →What Is CAGR (Compound Annual Growth Rate)?
CAGR stands for compound annual growth rate. It's the single, constant yearly rate that would grow a beginning value into an ending value over a given number of years, assuming the growth compounds each year. Because it smooths out the ups and downs of individual years into one steady rate, CAGR is the standard way to compare the annualized return of investments like a 401(k), an index fund, or a whole portfolio against an annual benchmark — regardless of how bumpy the ride was in between.
How to Use the CAGR Calculator
Enter three numbers and the result updates live — no submit button, no page reload:
- Open capsuletools.app/cagr-calculator/
- Beginning value — what the investment was worth at the start
- Ending value — what it's worth now, at the end of the period
- Duration — how long it was held, in Years or Months (use the toggle)
The tool shows your annualized return (CAGR) as a percentage, with the total cumulative return over the whole period beneath it. A loss — an ending value below the beginning value — is shown as a negative rate, in red, so gains and losses read at a glance.
Ending value: $16,500
Duration: 5 years
Cumulative return = (16,500 − 10,000) ÷ 10,000 = +65%
CAGR = (16,500 ÷ 10,000) ^ (1/5) − 1 = +10.53% per year
The CAGR Formula Explained
CAGR = (Ending Value ÷ Beginning Value) ^ (1 ÷ Years) − 1, written as a percentage. The ratio of ending to beginning value is the total growth factor; raising it to the power of one divided by the number of years finds the equivalent single-year rate; subtracting 1 turns the growth factor back into a percentage change. If you enter the duration in months, the calculator divides it by 12 first, so a 30-month period becomes 2.5 years before the formula is applied.
CAGR vs. Average Annual Return
These two are often confused. An average annual return is the simple arithmetic mean of each year's return — add the yearly percentages and divide by the number of years. It ignores compounding and tends to overstate real growth when returns swing from year to year. CAGR is the geometric rate that actually connects the starting and ending values, so it reflects what compounding really delivered. When yearly returns vary, CAGR is almost always the lower — and more honest — of the two figures.
Frequently Asked Questions
How do you calculate CAGR?
Divide the ending value by the beginning value, raise the result to the power of 1 divided by the number of years, then subtract 1. For example, 16,500 ÷ 10,000 = 1.65; 1.65 raised to the power of 1/5 is about 1.1053; subtract 1 to get 0.1053, or a 10.53% CAGR. This calculator does all three steps instantly as you type.
What's the CAGR formula?
CAGR = (Ending Value ÷ Beginning Value) ^ (1 ÷ Years) − 1, expressed as a percentage. "Years" is the length of time the money was held. If you enter the duration in months, the calculator converts it to years by dividing by 12 before applying the formula.
What's the difference between CAGR and average annual return?
An average annual return is the simple mean of each year's returns, which ignores compounding and can overstate growth. CAGR is the single constant rate that would take the beginning value to the ending value with compounding, so it reflects the smoothed, geometric growth rate. CAGR is almost always lower than the arithmetic average when returns vary from year to year.
What is a good CAGR percentage?
There is no universal threshold — a "good" CAGR depends entirely on what you are measuring and over what period. For reference only, broad stock market indexes have historically produced long-run nominal CAGRs in the high single digits to low double digits, while a savings account is much lower. This tool reports the math; it does not give financial advice or judge whether a figure is good.
Can I enter the duration in months instead of years?
Yes. Use the Years / Months toggle beneath the Duration field. When Months is selected, the calculator divides your figure by 12 to convert it to years before computing the annualized rate, so a 24-month period is treated as 2 years. The result is always an annual (per-year) rate regardless of which unit you enter.
Does this calculator handle SIP or monthly contributions?
No. This is a lump-sum CAGR calculator: it measures the growth of a single beginning value into a single ending value over one time period. It does not model recurring deposits such as a SIP, monthly contributions, or dollar-cost averaging — those need an internal-rate-of-return calculation instead. Enter only your starting balance and final balance here.
Use the free CAGR Calculator →
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