CAGR Calculator (Compound Annual Growth Rate)

One number for the return, another for the ride

CAGR compresses years into a comparable annual rate, but a smooth-looking number can hide a brutal path. Check what it took to survive with the drawdown recovery calculator, and project future compounding on the compound interest calculator.

CAGR smooths volatility into a single honest number

Compound annual growth rate removes the noise of a volatile path and shows what constant rate would produce the same end result. $1,000 → $3,200 in 4 years: CAGR = (3200/1000)^(1/4) − 1 = 33.8%. Whether you got there in a straight line or through a 70% drawdown and recovery, the CAGR is the same.

That's its strength and weakness. CAGR doesn't care about the path. Two portfolios with identical 4-year CAGRs can have totally different risk profiles — one held a stablecoin and one survived a 90% crash. The Sharpe or Sortino ratio captures what CAGR misses.

For crypto, CAGR over 1–2 year periods includes so much bull/bear cycle noise that comparisons across assets are tricky. BTC at 40% 4-year CAGR vs a DeFi token at 60% 4-year CAGR — without knowing the drawdown depths and what percentage of the run you'd realistically have captured, 60 > 40 isn't obvious.

Related: annualized return, ROI calculator, Sharpe ratio.

FAQ

What is CAGR and why use it? CAGR is the constant yearly rate that would take your starting value to your ending value over the period, as if it grew smoothly. It lets you compare investments of different lengths on one axis — a 300% gain over five years and a 100% gain over one year are very different annual rates.

What does CAGR not tell you? It ignores the path. A 40% CAGR could be a steady climb or a 90% crash followed by a huge recovery — the endpoints are identical. It also assumes reinvestment and says nothing about volatility or drawdown, so always read it alongside a risk measure, not on its own.