Scope
No intermediate cash flows.
This calculator assumes the starting value grows to the ending value without deposits or withdrawals. It is suitable for a clean point-to-point comparison, not a portfolio with irregular cash flows.
Investment performance
CAGR Calculator
Calculate the constant annual growth rate that connects a starting value with an ending value over a chosen period.
Compound annual growth rate—
Total return—
Absolute change—
Annualized point-to-point growth
Ending value multiple—
Simple total-return ÷ years—
—
—
Formula
CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1. The result is geometric and includes the effect of compounding.
What CAGR shows
A comparable annual rate, not the return earned each year.
CAGR smooths the full change into one constant annual rate. The actual path may have included gains, losses and volatility that the result does not reveal.
Source
Annualization accounts for compounding and holding time.
FINRA explains that annualized return is more useful than a simple average when comparing investments held for different periods because it incorporates compounding.