CAGR Calculator — Investment Return
Calculate compound annual growth rate or project a future investment value. Includes Rule of 72 and a multi-rate comparison table.
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What Is CAGR?
CAGR (Compound Annual Growth Rate) is the rate at which an investment would have grown if it grew at a steady annual rate. It smooths out volatility and gives you a single number representing overall performance. Formula: CAGR = (End / Start)^(1/n) − 1.
Why CAGR Is Better Than Simple Average Return
If an investment gains 50% one year and loses 33% the next, the simple average is +8.5% — but you're back to where you started. The CAGR is 0%. Simple averages can be misleading; CAGR tells you what actually happened to your money.
Sequence-of-Returns Risk
Even identical CAGRs can produce dramatically different outcomes depending on when gains and losses occur. Two portfolios with the same CAGR over 20 years may end at the same point — but if you're withdrawing funds (as in retirement), big early losses can permanently deplete your portfolio even if it recovers later. This is why sequence-of-returns risk matters most during the distribution phase.