CAGR (Compound Annual Growth Rate)
CAGR is the single steady yearly rate that would grow an investment from its start value to its end value over a period. It smooths out the ups and downs into one number, which is why it's the fairest way to compare investments held for different lengths of time.
A 50% total return sounds impressive until it is annualised: over ten years it is about 4.14% a year, and over five years 8.45%. The headline number is meaningless without the period attached, which is why marketing material so often omits it. CAGR also fixes a trap in simple averages — an investment that gains 50% then loses 50% has an average annual return of zero but has actually lost 25%, and only the compound figure shows that. Judge any investment by its annualised return against a benchmark such as a low-cost index fund. What CAGR hides is the path: it says nothing about how violently the value moved on the way.
Put it to work
ROI Calculator
Measure the return on any investment: total gain, total return (ROI), and the annualized return (CAGR) that lets you compare deals held for different lengths of time.
Investment Calculator
Project an investment portfolio's growth with monthly contributions — final value, your money vs market growth, and the year-by-year path.
Compound Interest Calculator
See how your savings grow with compound interest and monthly contributions — final balance, interest earned, and a year-by-year growth table.