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Annualized Return Calculator (CAGR)

Investment A made 20% in 2 years. Investment B made 30% in 4 years. Which is better? Use this calculator to find the 'true' annual speed of your money.

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FAQ

What is CAGR?
Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer than one year. It smooths out the volatility of returns.
Why is Average Return misleading?
If you lose 50% one year and gain 50% the next, your 'average' return is 0%, but you have actually lost 25% of your money. CAGR accounts for this geometric reality.
What is a good CAGR?
The S&P 500 historically returns about 10% (nominal) or 7% (real, inflation-adjusted). Anything above 12-15% over a long period is considered exceptional performance.
Is this calculator free to use?
Yes, this tool is 100% free to use. You can perform as many calculations as needed without any hidden fees or subscriptions.
Is my data secure?
Absolutely. We prioritize your privacy by processing all calculations locally in your browser. Your input data is never sent to our servers or stored in any database.
Can I use this on mobile?
Yes, our calculator is fully responsive and optimized for all devices, including smartphones, tablets, and desktop computers.
How accurate are the results?
We use standard industry formulas to ensure high accuracy. However, results should be used as estimates. For critical decisions, please consult a professional.

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The Lie of 'Average' Returns

Wall Street loves to market funds using 'Average Annual Return', but this metric is mathematically flawed for investors. **Example:** * Year 1: +100% (Portfolio goes from $100 to $200) * Year 2: -50% (Portfolio goes from $200 to $100) **Average Return:** (100 - 50) / 2 = **+25%**. **Actual Return:** $0. You started with $100 and ended with $100. Your CAGR is 0%. CAGR is the only metric that tells you the truth about how your wealth actually compounded over time.

The Formula for Truth

CAGR = (Ending Value / Beginning Value) ^ (1 / Years) - 1 This formula finds the single interest rate that, if applied every year steadily, would get you from your starting number to your ending number. It ignores the volatility in between.

Comparing Apples to Oranges

Use CAGR to compare investments with different time horizons: * **Real Estate:** Bought for $300k, sold for $500k after 10 years. * **Stocks:** Bought for $50k, sold for $90k after 6 years. Without CAGR, it's hard to say which capital was 'working harder'. With CAGR, you can instantly see the annual velocity of each asset.

Data Privacy & Security

In an era where digital privacy is paramount, we have designed this tool with a 'privacy-first' architecture. Unlike many online calculators that send your data to remote servers for processing, our tool executes all mathematical logic directly within your browser. This means your sensitive inputs—whether financial, medical, or personal—never leave your device. You can use this tool with complete confidence, knowing that your data remains under your sole control.

Accuracy and Methodology

Our tools are built upon verified mathematical models and industry-standard formulas. We regularly audit our calculation logic against authoritative sources to ensure precision. However, it is important to remember that automated tools are designed to provide estimates and projections based on the inputs provided. Real-world scenarios can be complex, involving variables that a general-purpose calculator may not fully capture. Therefore, we recommend using these results as a starting point for further analysis or consultation with qualified professionals.

Fact-checked and reviewed by CalcPanda Editorial Team
Last updated: January 2026
References: WHO Guidelines on BMI, World Bank Financial Standards, ISO Calculation Protocols.
Annualized Return Calculator | CAGR Formula for Investments