A Moneybren tool

CAGR CALCULATOR

What's your actual annual return? Find out in seconds.

How to use this calculator

This calculator calculates the compounded annual growth rate (CAGR) between two values.

For example, if you invested $10 in 2003, and it's grown to $1 million today, this calculator will work out your growth rate on an annual basis.

The CAGR is one of the most common metrics in investing to measure your annual return.

In the calculator simply enter your initial value, your ending value, and the number of periods.

As an example, if you are calculating the return between 2001 and 2005, your data may look something like this:

20012002200320042005
$10$22$43$60$79

Keep in mind, while this might look like five years, the correct input is actually four years (in the same way that calculating the return between 2001 and 2002 would be one year, not two).

$
$
yrs
2001 to 2005 is four periods, not five.
Your compounded annual growth rate is…
0%
How the maths works CAGR = (ending value ÷ starting value)1/periods − 1. It's the single steady annual rate that would take your starting value to your ending value — the actual journey was bumpier, but this is the honest average. For context, the NZX 50's long-run average is around 10% per year.
This is a tool only, and none of the information it produces is financial advice. Its accuracy is not guaranteed. Always check your own figures and get advice from your own financial professionals before making decisions.

A worked example

Say you put $10,000 into something and five years later it's worth $18,000.

Your total return was 80%. But what did it earn per year? Punch it in and the CAGR - compound annual growth rate - comes out at about 12.5% a year.

That's the number that actually lets you compare things. An 80% gain sounds great until you learn it took fifteen years (that's only about 4% a year). CAGR strips out the time and gives you one clean annual figure you can hold up against anything else.

Drop in your own start value, end value and number of years to see what you really earned.

What most people get wrong about returns

Here's the trap: your average return and your actual return are not the same thing.

Say an investment goes up 50% one year, then down 50% the next. Average those and you get 0% - sounds like you broke even. You didn't. Turn $100 into $150, then lose half, and you're left with $75. You lost a quarter of your money, even though the "average" was zero.

That gap is called volatility drag, and it's why CAGR matters. CAGR tells you what actually happened to your money over time - not the flattering average that ignores the order and the wild swings.

So when someone brags about a big "average annual return," ask what the CAGR was. It's usually a lot less exciting, and it's the only number that tells the truth.

This calculator and page are general information only and not financial advice. Everyone's circumstances will vary - always do your own research and consult your own financial professionals before making decisions.