CAGR Calculator: Compound Annual Growth Rate with Market Comparison

Calculate the mean annual growth rate of investments over time. Compare your CAGR against historical averages of S&P 500, NASDAQ, and Gold.

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About

The Compound Annual Growth Rate (CAGR) is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time. Unlike absolute return rates, which can be misleading if the investment period varies, CAGR provides a smoothed annual rate that describes the growth of an investment as if it had grown at a steady rate on an annually compounded basis.

Investors rely on this metric to compare the performance of two distinct assets over different time horizons. Whether you are analyzing a stock portfolio, a startup valuation, or real estate appreciation, understanding the geometric progression ratio allows for an 'apples-to-apples' comparison against benchmarks like the S&P 500 or inflation.

investment analysis growth rate financial metrics portfolio performance

Formulas

The formula for CAGR requires the beginning value, the ending value, and the total number of years (n). It calculates the geometric mean:

CAGR = ( EVBV )1n − 1

Where EV is the Ending Value, BV is the Beginning Value, and n is the number of years.

Reference Data

Asset Class / IndexTime Period (Historic)Approx. CAGRRisk Profile
S&P 500 (with Dividends)1957 - 202310.15%Medium
NASDAQ 1001985 - 202313.40%High
Gold (USD)1971 - 20237.80%Medium
US Real Estate (Case-Shiller)1987 - 20235.40%Medium
US Inflation (CPI)1913 - 20233.10%N/A
Emerging Markets (MSCI)1988 - 20239.20%High
Long-Term Treasuries1926 - 20235.10%Low
Small Cap Stocks (Russell 2000)1984 - 20239.80%High
Corporate Bonds (IG)1926 - 20235.70%Low
Bitcoin2010 - 2023>100%Extreme
Global REITs2000 - 20238.50%Medium
Commodities (GSCI)1970 - 20236.20%High

Frequently Asked Questions

Average annual return uses a simple arithmetic mean, which ignores the effects of compounding and volatility. If an investment drops by 50% one year and gains 50% the next, the average return looks like 0%, but you have actually lost money. CAGR accounts for this by measuring the geometric progression.
Yes. If the Ending Value is lower than the Beginning Value, the CAGR will be negative, indicating a loss of capital over the specified period.
A 'good' CAGR is relative to the risk taken and inflation. Generally, beating the S&P 500 (approx. 10%) is considered excellent for equities. For safer investments, anything beating inflation (3-4%) preserves purchasing power.
The variable 'n' in the formula represents time in years. If your investment period is 2 years and 6 months, you should input 2.5 as the value for n.
CAGR is strictly a calculation based on the initial and final values you input. To include dividends, you must add the value of reinvested dividends to your Ending Value input.