Annualized return (CAGR).
These calculators use standard financial formulas (amortization, compound interest, marginal tax brackets) to estimate results based on the numbers you enter. They don't account for your full financial picture, and results shouldn't be treated as financial, tax, or investment advice. For decisions with real money on the line, check the numbers with a lender, accountant, or financial advisor who can see your complete situation.
CAGR (Compound Annual Growth Rate) is the constant annual return equivalent to your actual gain over multiple years.
Formula: CAGR = (End/Start)^(1/years) − 1.
CAGR is the standard way to compare two investments held for different lengths of time on equal footing — a 50% total gain over 3 years and a 50% total gain over 8 years represent very different annual performance once converted to CAGR.
$1,000 → $1,500 over 3 years: CAGR = 14.47% — the equivalent constant yearly return.
ROI is total percent gain (here 50%); CAGR is annualized (14.47%/yr). CAGR is fairer for comparing investments of different lengths.
Yes — it treats the journey as a straight line. Two investments with equal CAGRs can feel very different if one is stable and the other swings.
Yes — if the end value is lower than the start value, CAGR comes out negative, representing an average annual loss over the period.