Calculate the Compound Annual Growth Rate (CAGR) of any investment. Enter your beginning value, ending value, and number of years held to find out your annualized return — the true yearly growth rate that accounts for compounding over your holding period.
Annualized Return (CAGR)
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Total Return
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Investment Gain / Loss
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Ending Value
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The annualized return, also known as the Compound Annual Growth Rate (CAGR), is the rate at which an investment would have grown each year if it grew at a steady rate. It smooths out volatility and gives you a single, comparable yearly figure for how your investment has performed over a holding period.
The formula is: CAGR = (Ending Value / Beginning Value)^(1 / Years) – 1. For example, if you invested $1,000 and it grew to $2,000 over 5 years, your CAGR would be (2000/1000)^(1/5) – 1 = 14.87% per year.
Total return is the overall percentage gain or loss from start to finish, regardless of how long the investment was held. Annualized return (CAGR) converts that total return into a per-year equivalent, making it easier to compare investments held for different time periods.
Yes. The CAGR formula applies universally to any asset — stocks, mutual funds, real estate, ETFs, or a business. As long as you know the beginning value, ending value, and the number of years held, you can calculate the annualized return.
If your ending value is lower than your beginning value, the calculator will return a negative CAGR, indicating an annualized loss. For example, if $10,000 dropped to $7,000 over 3 years, the CAGR would be approximately –11.21% per year.
This calculator uses the simple CAGR formula based on beginning and ending values. If dividends were reinvested or additional contributions were made, you should include their effect in the ending value to get a more accurate result.
Total return alone doesn't tell you how long it took to achieve the gain. A 100% total return over 20 years is far less impressive than the same gain over 5 years. CAGR normalizes performance across time, making it the standard metric for comparing investment results.
Historically, the S&P 500 has delivered an average annualized return of roughly 10% per year before inflation. A 'good' CAGR depends on the asset class, risk level, and time horizon, but anything consistently above market benchmarks is generally considered strong performance.