How do you calculate CAGR?

Divide the ending value by the beginning value, raise it to the power of one over the number of years, and subtract one: CAGR = (end / begin)^(1/years) − 1.

What is the difference between CAGR and ROI?

ROI is the total percentage gain over the whole period; CAGR is the constant annual rate that produces that gain with compounding. CAGR lets you compare investments held for different lengths of time.

For a business, 15%+ per year is venture-scale compounding. For public-market investing it would be exceptional — the long-run S&P 500 CAGR is roughly 10%.

Omega Point Systems

Calculator / 03

Compound annual growth, solved.

CAGR, total return, and annualized return — what the curve says when you smooth it.

Start from a preset

Inputs

Starting value

Ending value

Time horizon

years

∎Compounding, but below venture-scale. Market-rate.

Outputs

CAGR

10.00%

compound annual growth rate

Total ROI

159.37%

over 10 years

Annualized

15.94%

linear average

Multiple

2.59×

end / start

Value over timecompounded value

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This free calculator computes compound annual growth rate (CAGR), total return on investment, and the annualized average from a start value, an end value, and a horizon.

How to calculate CAGR

CAGR = (ending value ÷ beginning value) raised to the power of (1 ÷ years), minus 1. It smooths a multi-year change into the single constant annual rate that would have produced it. Total ROI is (ending − beginning) ÷ beginning; annualized ROI just divides total ROI by the number of years.

How to read the result

CAGR is the honest way to compare returns over different time spans because it accounts for compounding; simple averages overstate it. Above roughly 15% per year is venture-scale; 8–15% is market-rate; below that the system is not compounding fast enough to matter.

Worked example

$10,000 growing to $25,937 over 10 years is a 10% CAGR — the long-run S&P 500 reference. Total ROI is 159%, but the annualized-average framing (15.9%) flatters it; CAGR is the figure that actually compares across horizons.

Frequently asked questions

How do you calculate CAGR?: Divide the ending value by the beginning value, raise it to the power of one over the number of years, and subtract one: CAGR = (end / begin)^(1/years) − 1.
What is the difference between CAGR and ROI?: ROI is the total percentage gain over the whole period; CAGR is the constant annual rate that produces that gain with compounding. CAGR lets you compare investments held for different lengths of time.
Is a 15% CAGR good?: For a business, 15%+ per year is venture-scale compounding. For public-market investing it would be exceptional — the long-run S&P 500 CAGR is roughly 10%.