How to use this calculator
- Enter what the investment was worth at the start and what it’s worth now.
- Enter how many years you held it — fractions of a year are fine.
- Add inflation and a benchmark rate, such as a CD yield, to put the result in context.
Frequently asked questions
What is CAGR?
Compound annual growth rate — the steady yearly return that would take an investment from its starting value to its ending value. It smooths out a bumpy ride into one number you can compare.
How is CAGR different from total return?
Total return ignores time. Growing $10,000 into $18,000 is a 80% total return, but over 7 years that’s a CAGR of 8.76% a year.
What is real CAGR?
Growth after inflation. A 8.76% CAGR with 3% inflation works out to 5.59% in real terms — the rate your purchasing power actually grew.
Is CAGR the same as average annual return?
No. A simple average of yearly returns overstates growth when returns swing up and down; CAGR reflects what actually compounded.
Can I use CAGR for regular contributions?
Not on its own — CAGR assumes a single investment at the start. For money added over time, an internal rate of return (IRR or XIRR) is the right measure.