CAGR Calculator for Annualized Investment Growth
A CAGR calculator measures the compound annual growth rate of an investment over a period. CAGR is useful because it smooths year-to-year fluctuations and shows the annualized rate at which an investment would have grown from the starting value to the ending value. Enter the initial value, final value and number of years to calculate CAGR, absolute gain and final amount. Investors often use CAGR to compare mutual funds, stocks, portfolios, business growth, revenue growth and goal progress. CAGR does not show volatility, interim drawdowns or cash flows, so it should be combined with risk metrics and context before making an investment decision.
CAGR Calculator FAQs
Is CAGR the same as absolute return?
No. Absolute return is total gain, while CAGR annualizes growth across the period.
Can CAGR be negative?
Yes. CAGR is negative when the final value is lower than the initial value.
Does CAGR include cash flows?
No. For multiple cash flows, use XIRR instead of simple CAGR.