Cargando…
Get the annualised return on your investment (CAGR). Enter starting capital, final value and time frame to see the real return you achieved.
This CAGR calculator turns the total return of an investment into an annual rate: enter the starting capital, the final value and the years, and you get the compound annualised return, comparable with any index or fund.
TCAC = (Capital Final / Capital Inicial)1/years - 1
Annualised return (CAGR)
+20.11%
per year over 5 years
What is CAGR? The Compound Annual Growth Rate (CAGR) is the average annual return on an investment, assuming gains are reinvested.
It is useful for comparing investments of different durations and for stripping out annual volatility to see the underlying trend.
Calculate the CAGR of up to 5 portfolios or assets with different dates
Click "Add portfolio" to start calculating the CAGR of several investments
In finance, intuition tends to mislead. If you gain 50% one year and lose 50% the next, your arithmetic average return is 0% — but you have actually lost money (start with €100, rise to €150, then fall to €75).
CAGR (Compound Annual Growth Rate) or CAGR is the only honest measure of an investment's performance over time, because it smooths volatility and tells you how much your money really grew on an annual basis.
"Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas."
— Paul Samuelson (Nobel Prize in Economics)
Making 100% (doubling your money) sounds incredible. But if it took 20 years, your annual return is barely 3.5% — about the same as historical inflation.
This tool helps you put your results in perspective and compare them fairly (like for like) against indices such as the S&P 500, or against inflation.
CAGR (compound annual growth rate) is the constant annual rate that would take your starting capital to the final value in that number of years, as if it had grown evenly. It is the total return run through compound interest and spread across the years.
CAGR = (final value / starting value) ^ (1 / years) − 1
With €10,000 that becomes €25,000 in five years: (25,000 / 10,000) to the power of 1/5, minus 1, gives 20.1% a year. It is not 150% divided by 5 (30%): compounding spreads the gain differently, which is why CAGR is always below the arithmetic average.
Four cases worked out with the calculator’s own function. Doubling your money is a 100% total return, but it is an excellent investment over 10 years and a mediocre one over 20.
| Scenario | Total return | CAGR |
|---|---|---|
| €10,000 → €25,000 in 5 years | +150 % | +20.1 % a year |
| €10,000 → €20,000 in 10 years | +100 % | +7.2 % a year |
| €10,000 → €20,000 in 20 years | +100 % | +3.5 % a year |
| €10,000 → €8,000 in 3 years | -20 % | -7.2 % a year |
No contributions or withdrawals during the period, and no taxes or fees deducted. If you have been contributing every month, CAGR does not apply: below we tell you what to use.
Excel (2013 onwards) and Google Sheets have a function that calculates it directly: RRI, with the number of years, the starting value and the final value. To see the result as a percentage, format the cell as a percentage.
=RRI(years, starting value, final value)
If your Excel is older or you prefer the explicit formula, the power is enough:
=(final value / starting value) ^ (1 / years) − 1
If there were contributions or withdrawals on different dates, use XIRR with the list of cash flows and their dates: it returns the annual rate that accounts for when each euro went in.
They are all “returns”, but they answer different questions. Comparing a CAGR with an APR or an arithmetic average is the most common way to fool yourself.
A CAGR only means something compared with what the market did over the same period. These are the long-term historical benchmarks the calculator uses, nominal and after an average inflation of 2.5 %: what your purchasing power really grew.
| Benchmark | Nominal CAGR | Real CAGR |
|---|---|---|
| S&P 500 (long term) | 10.0 % | 7.3 % |
| IBEX 35 (long term) | 6.0 % | 3.4 % |
| Bonds | 3.0 % | 0.5 % |
Long-term historical averages, rounded; they do not guarantee future returns and vary a lot depending on the period. The real return is calculated as (1 + nominal) / (1 + inflation) − 1, not by subtracting.
The compound annual growth rate: the constant yearly percentage that turns the starting value of an investment into its final value over a number of years. It is calculated as (final / starting) to the power of 1/years, minus 1.
Total return measures how much the money grew over the whole period; the annualised return (CAGR) spreads it across the years with compounding. A 100% total return over 10 years is 7.2% a year; over 20 years, 3.5%.
No. APR is the annual rate of a product with an agreed interest, such as a deposit, including fees and payment frequency. CAGR is the annual return an investment achieved when the outcome was not agreed in advance. Both are annual and compound, but they measure different things.
Not with this formula: CAGR assumes a single sum at the start. With contributions or withdrawals, use IRR (XIRR in Excel) with the date of each movement, or the money-weighted return your broker shows.
It depends on the period and the risk. As a long-term historical reference, the US stock market is around 10% nominal, the Spanish market 6% and bonds 3%; after inflation, about 2.5 points less. Always compare with the index of your own asset class and period.
No. It is an educational tool that applies a formula to the data you enter. It does not know your situation and does not deduct taxes or fees. For investment decisions, consult an adviser registered with the CNMV.