CalcWealth

Free CAGR Calculator — Compound Annual Growth Rate

Enter a beginning value, ending value, and number of years to instantly calculate compound annual growth rate. Compare your portfolio against the S&P 500 benchmark.

Use this free CAGR calculator to measure the steady annual growth rate of any investment — stocks, real estate, business revenue, or a portfolio. Applies the formula CAGR = (End / Start)^(1/n) − 1and lets you benchmark results against historical S&P 500 returns. No sign-up required.

What Is CAGR (Compound Annual Growth Rate)?

CAGR is the annual growth rate that smooths out volatility to show the steady rate at which an investment would have grown from its beginning value to its ending value. Real markets zig-zag every year; CAGR replaces that noise with a single representative growth rate.

It is the gold standard for comparing investments over different time horizons. Without CAGR, comparing a 5-year investment against a 10-year one is like comparing apples to oranges. CAGR normalises the timeline so you can make meaningful side-by-side comparisons.

The S&P 500 achieved a 10.5% nominal CAGR from 1957–2023. That benchmark is the standard against which active managers, individual portfolios, and alternative investments are measured.

How to Use This CAGR Calculator

  1. 1

    Enter the Beginning Value

    The starting value of your investment — the amount you invested or the starting price of the asset. For example, $10,000 for the initial investment in a portfolio.

  2. 2

    Enter the Ending Value

    The current or final value of your investment. For example, $19,672 if your $10,000 portfolio is now worth $19,672. You can also enter a target ending value to solve for the required CAGR.

  3. 3

    Enter the Number of Years

    The total investment period in years. Use decimals for partial years — for example, 2.5 for two and a half years. The calculator handles non-integer periods accurately.

  4. 4

    Read Your CAGR and Benchmark

    The calculator shows your CAGR, the implied ending value at various benchmark rates (S&P 500 at 7% and 10.5%), and total gain — so you can instantly see how your investment compares.

The CAGR Formula Explained

CAGR = (Ending Value / Beginning Value)1/n − 1
EV
Ending Value
The final value of the investment at the end of the holding period
BV
Beginning Value
The initial value of the investment at the start of the holding period
n
Number of Years
The total holding period in years (can be a decimal)

Worked example: $10,000 grows to $19,672 over 10 years:

CAGR = (19,672 / 10,000)1/10 − 1 = (1.9672)0.1 − 1 = 7.0%

Real-World Examples

Use these benchmarks to contextualise your own investment returns.

S&P 500 benchmark: $10,000 → $19,672 over 10 years

CAGR = 7.0%— the inflation-adjusted historical average of the S&P 500. This is the most commonly used benchmark for long-term portfolio planning. If your portfolio grew from $10,000 to less than $19,672 in 10 years, you underperformed the market on a real basis.

Tech portfolio: $25,000 → $98,500 over 8 years

CAGR = 18.7% — significantly outperforming the market. A $25,000 investment that grew to $98,500 in 8 years represents a 294% total return. An S&P 500 index fund at 10.5% CAGR over the same 8 years would have grown to only $55,800 — nearly $43,000 less. High CAGR often comes with higher risk and concentration.

Real estate: $200,000 property → $350,000 over 7 years

CAGR = 8.3%— competitive with equity markets. A $200,000 property worth $350,000 after 7 years delivers a 75% total return and an 8.3% CAGR — ahead of the 7% inflation-adjusted S&P 500 average. Note: this calculation excludes rental income, maintenance costs, and leverage effects. Total return including net rental yield could be materially higher.

Frequently Asked Questions

What is CAGR?
CAGR stands for Compound Annual Growth Rate. It is the rate at which an investment would have grown if it grew at a steady annual rate. CAGR smooths out the volatility of year-to-year returns into a single representative number, making it the standard metric for comparing investments across different time horizons.
How do I calculate CAGR?
The CAGR formula is: CAGR = (Ending Value / Beginning Value)^(1/n) − 1, where n is the number of years. Example: $10,000 grows to $19,672 in 10 years → CAGR = (19,672 / 10,000)^(1/10) − 1 = (1.9672)^0.1 − 1 = 0.07 = 7.0%. Enter your beginning value, ending value, and number of years in the calculator above.
What is a good CAGR?
A CAGR above the S&P 500's long-term historical average of 10.5% (nominal) or 7% (inflation-adjusted) is considered strong for a diversified portfolio. Individual stocks or sectors can achieve 15–25% CAGR over shorter periods. For context: Warren Buffett's Berkshire Hathaway achieved a ~20% CAGR from 1965–2023. For most investors, a consistent 8–12% CAGR is an excellent long-term outcome.
What is the difference between CAGR and average return?
Average (arithmetic) return simply adds up annual returns and divides by years. CAGR (geometric return) accounts for compounding and reflects the actual growth of your money. Example: +50% one year, −33% the next has an average return of +8.5%, but a CAGR of 0% — because $100 → $150 → $100 is flat. CAGR is always the more accurate measure of real investment performance.
What is the S&P 500 CAGR?
The S&P 500's historical CAGR depends on the time period chosen. From 1957–2023: approximately 10.5% nominal CAGR, or about 7% real CAGR after inflation. Over the last 10 years (2014–2023): approximately 12.4% nominal CAGR. Over the last 30 years: approximately 10.7% nominal CAGR. Use 7% (real) for conservative long-term projections and 10.5% (nominal) if not adjusting for inflation.
What are the limitations of CAGR?
CAGR has three key limitations: (1) It ignores volatility — two portfolios can have the same CAGR but very different risk profiles. (2) It assumes a steady growth rate that never exists in practice. (3) It is sensitive to start and end dates — measuring from a market peak or trough can dramatically skew results. Always use CAGR alongside other metrics like standard deviation and maximum drawdown for a complete picture.

Related Investment Calculators

⏮️

Present Value Calculator

Calculate the present value of future cash flows and see what a future sum is worth in today's dollars.

Use Calculator →
⏭️

Future Value Calculator

Calculate the future value of any investment or cash flow series to see exactly how much you'll have later.

Use Calculator →
📊

ROI Calculator

Calculate return on investment (ROI) instantly — enter cost and gain to see your percentage return and profit.

Use Calculator →
💵

APY Calculator

Convert APR to APY and compare savings account rates. See the true annual yield with compounding factored in.

Use Calculator →
View all calculators →