Investment Return Calculator
Find your investment's compound annual growth rate or project how it grows. Enter start and end values to calculate CAGR, or provide a rate to forecast your future balance.
How CAGR is calculated
In CAGR mode, the calculator solves for the constant annual rate that transforms the start value into the end value over the stated number of years: CAGR = (end / start)^(1 / years) − 1. In projection mode, it reverses this: final value = start × (1 + rate)^years. Both are exact closed-form calculations with no approximations. The result represents a smoothed single-rate equivalent - the actual path of returns year to year may have been very different.
What this doesn't include
CAGR is a backward-looking or assumption-based metric. It does not account for tax on capital gains or dividend income, ongoing investment fees (which can reduce effective CAGR by 0.3–2.0% annually for managed funds), or the volatility and sequence of returns along the way. Two investments with identical CAGR can have very different risk profiles. A stock that doubles every other year and halves in between has the same CAGR as one that grows steadily - but is far more stressful to hold.
Why your platform's return figure may look different
Investment platforms may show time-weighted return, money-weighted return (IRR), or simple return depending on the context. Time-weighted return removes the effect of cash flows, making it suitable for comparing fund performance. Money-weighted return (IRR) captures the investor's actual experience including the timing of contributions and withdrawals. CAGR between two specific dates is a special case of time-weighted return for a single lump sum. If you have made contributions along the way, CAGR between start and end values overstates your actual return.
Frequently asked questions
What is CAGR and how is it different from average annual return?
CAGR (Compound Annual Growth Rate) is the single constant annual rate that would grow an investment from its start value to its end value over the given period. Average annual return simply averages the yearly percentage changes. These differ because of compounding: if an investment falls 50% then rises 100%, the average return is 25% but the CAGR is 0% - you are back to where you started. CAGR is a more accurate measure of actual investment performance.
How do I calculate CAGR manually?
CAGR = (end value / start value)^(1 / years) − 1. For example, £10,000 growing to £18,000 over 8 years: (18,000 / 10,000)^(1/8) − 1 = 1.8^0.125 − 1 ≈ 0.0764 = 7.64% per year. Enter any two values and the number of years in the CAGR mode above and the calculator will do this automatically.
What is a good CAGR for an investment?
It depends on the asset class and time period. Global equity indices have delivered roughly 7–10% CAGR over long periods in nominal terms. After inflation, real returns are typically 4–7%. Individual stocks can be higher or lower. For property, long-run nominal CAGR has been 4–6% in most developed markets. Anything above 15% CAGR consistently over 10+ years is exceptional - benchmark against the relevant index, not an absolute number.
Does CAGR include dividends or only price appreciation?
It depends on the values you enter. If you enter a start and end value that include dividends reinvested, CAGR captures total return. If you enter only the price movement, CAGR reflects only the capital gain. For most investment comparisons, total return CAGR - including dividends reinvested - is the relevant measure. Check whether your platform reports a total return value or a price-only value.
How does CAGR compare to IRR?
CAGR measures the annualised rate of return between two points in time with a single start and end value. IRR (Internal Rate of Return) handles multiple cash flows at different times - making it more useful for investments with ongoing contributions or withdrawals. Use CAGR for a simple lump-sum investment. Use IRR (or XIRR in a spreadsheet) for evaluating an investment portfolio with contributions over time.
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The repayment engines behind this site are tested against worked examples published by FRED, the Bank of Canada, the Bank of England and the Reserve Bank of Australia. Found an error? Contact us