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Tool

CAGR calculator

The compound annual growth rate is the one steady rate that turns a starting value into an ending value. Two balances and a period is all it takes, and if you added money during that period, that answer is not the rate your money earned. This calculates both. It runs in your browser: nothing you type is sent anywhere, and nothing is saved when you leave.

The period
Money you added or took out (optional)

Leave these blank for the plain three-input answer. Declare even one deposit and a second rate appears, because a deposit raises the ending value without having earned the increase. Only money you moved in or out counts. A dividend paid into the account is already inside the value.

CAGR from the two balances
19.13%

Over 5.00 years. This is the figure every three-input calculator returns.

Total growth
140.00%

Cumulative, not per year, and it counts every deposit as growth.

No contributions declared
—

With no deposits or withdrawals, the figure on the left is already true of your money.

Why two figures

CAGR from two balances answers a question about the balances. It is the correct, standard calculation, and for a lump sum left alone it is exactly the rate you earned. Fund fact sheets report this figure, and so does every three-input calculator.

It stops being your return the moment you add money. The ending balance contains your deposits, and the formula only ever sees two numbers, so it cannot separate a dollar you contributed from a dollar the market produced, and credits both to the investments. An account that doubled because its owner contributed as much again did not return 100%.

The second figure is a money-weighted return, an internal rate of return, the same calculation a spreadsheet calls XIRR. It weights every dollar by how long it was actually invested, so a deposit made last month cannot claim a year of growth.

What this does not handle

  • It is not a benchmark comparison. A money-weighted rate reflects when your money arrived, and an index has no deposits, so the two are not comparable. For that you want a time-weighted return, and the return calculator computes one, and it asks for your portfolio value at each cash flow because that is what a time-weighted return needs.
  • Only external money is a contribution. Cash you deposited or withdrew. A dividend received and a security sold are both inside the portfolio already; entering them here would count them twice.
  • One currency. A portfolio holding both Canadian and US securities carries an exchange-rate effect inside every figure here, and separating it needs a rate per date rather than one at the end.
  • It says nothing about the path. Two portfolios with the same CAGR can have had completely different journeys, and if you had to sell during a decline the identical rate describes an outcome you did not get.
  • Short periods are not annualised meaningfully. Raising a few weeks to an annual power produces a confident figure out of noise. Use a period long enough to be worth comparing.

Educational only, and accurate to what you enter. This is not advice and it is not a projection. For the concepts behind it, read CAGR vs average annual return and time-weighted vs money-weighted return. For how Luum computes returns across your real accounts, see portfolio returns.