CAGR & IRR Calculator

• Calculates the compound annual growth rate from a starting value, an ending value and the years held, or the dates.
• Solves the internal rate of return for up to 24 dated cash flows, using the same 365-day convention as Excel's XIRR, with a fallback solver that cannot diverge.
• Shows total return, the money multiple, the rate after inflation, and how much ahead or behind a benchmark you finished.
• Explains clearly what it cannot tell you: IRR is money-weighted, so it reflects when you added or removed money, not only how the investment did.

How to use this calculator

Choose what you want to calculate. For CAGR, enter the value you started with, the value you ended with and the number of years in between. Decimals work: 2.5 means two and a half years. For IRR, use the cash-flow list. Enter every deposit as Money in and every withdrawal as Money out, each with its date. Then add the current value of the investment as a final Money out row dated today, because that is what you would receive if you cashed out.

The benchmark rate is any yearly return you want to compare against, for example what you would have expected from a broad index fund. It is your own assumption. Open Advanced to enter start and end dates instead of years for CAGR, and to set the inflation rate used for the after-inflation figure.

Dates are typed as year-month-day, for example 2026-03-15. Rows can be in any order; the calculator sorts them. You need at least one row of money in and one of money out, otherwise there is nothing to measure.

What CAGR is and how it is calculated

Compound annual growth rate is the single constant yearly rate that would take a starting value to an ending value over a number of years, with each year's growth added to the base the next year grows from. It smooths a bumpy path into one number so you can compare investments held for different lengths of time.

CAGR         = (ending value / starting value)^(1 / years) - 1
Total return = ending value / starting value - 1
After inflation = (1 + CAGR) / (1 + inflation) - 1
Years to double = ln 2 / ln(1 + CAGR)

CAGR only works when there is one starting value and one ending value and nothing was added or taken out in between. If you made deposits along the way, the ending value is partly your own money, and CAGR would overstate how well the investment did. That is the situation the IRR half of this calculator is for.

A worked CAGR example

Suppose $10,000 grows to $18,000 over 6 years. The total return is 80%. Dividing that by six years gives 13.33% a year, but that is not how compounding works: each year's gain is earned on a bigger base. The CAGR is 10.29% a year, which is the rate that, compounded for six years, turns $10,000 into $18,000 exactly.

Against a 7% benchmark, the same $10,000 would have reached $15,007, so this investment finished $2,993 ahead, 3.29 percentage points a year. After 2.5% inflation the real growth rate is 7.6%. At 10.29% a year, money doubles in about 7.1 years.

Dates work the same way. $1,000 on 1 January 2020 that is worth $1,210 on 1 January 2022 spans 731 days, which the calculator treats as 2.003 years, giving 9.99% a year.

Why the average return is not the CAGR

The most common mistake with returns is averaging them. Say an investment falls 50% in one year and rises 50% the next. The simple average is 0%, which sounds like breaking even. It is not: $10,000 drops to $5,000 and then rises 50% to $7,500. Entering $10,000, $7,500 and 2 years gives a CAGR of -13.4% a year, which is the true compound result.

The gap between the arithmetic average and the CAGR grows with volatility. That is why a fund's quoted five-year annualized return will usually be lower than the average of its five annual returns, and why a steady 6% can beat a volatile 7% average over a long time. When you compare investments, compare compound rates, not averages.

IRR and XIRR: when money goes in and out

The internal rate of return is the single yearly rate that makes the present value of all your cash flows add up to zero. Another way to say it: it is the interest rate at which a bank account would have turned your actual deposits and withdrawals into the same final result. With dates attached, spreadsheets call this XIRR. This calculator uses the same convention Excel documents: each flow is discounted by the number of days from the first flow divided by 365.

The default list shows $15,000 paid in over two deposits and $21,000 received back, through a small withdrawal and a final value. The net gain is $6,000 and the money multiple is 1.40x, but because part of the money was invested for much less time than the rest, the IRR is 6.92% a year, quite different from what you would get by dividing the gain by the amount paid in.

There is no formula that solves IRR directly. The calculator tries Newton's method first and, if that does not settle, scans for a rate where the answer changes sign and narrows in by bisection, which cannot diverge. If your cash flows never change from money in to money out, no rate exists and the calculator says so instead of showing a number.

Money-weighted versus time-weighted returns

IRR is a money-weighted return: big amounts invested for long periods count for more than small amounts invested briefly. That is exactly right for answering "how did my money do?" but it is not how funds report performance. Funds and managers normally report a time-weighted return, which removes the effect of deposits and withdrawals so that managers are judged on decisions they control rather than on when investors chose to buy or sell.

The difference can be dramatic. Imagine a fund that gains 20% in year one and loses 10% in year two. An investor who puts in $1,000 at the start and holds to the end finishes with $1,080, an IRR of 3.92% a year. A second investor adds $9,000 after the good year, just before the loss, and ends with $9,180 from $10,000 paid in: an IRR of -7.51% a year. Same fund, same two years, very different personal results. The fund's time-weighted return is 3.92% a year in both cases; the second investor's timing is what dragged the IRR down.

Neither measure is better in general. Use IRR for your own account, real estate, private investments and anything where you control the timing. Use a time-weighted figure when you want to judge a fund or compare managers.

Annualized versus total return

Total return says how much you made. Annualized return says how fast. Both matter. A total return of 80% over six years is 10.29% a year; the same 80% over three years would be a much higher rate, and over twelve years a lower one.

Be careful annualizing short periods. A gain of 10% in three months ($10,000 to $11,000 in 0.25 years) annualizes to 46% a year. That number is correct arithmetic and almost meaningless as a prediction, because no one can repeat a good quarter four times. The calculator warns you when the period is under a year. For short periods, quote the total return and the dates, not the annualized rate.

The same caution applies to IRR on short or lumpy cash flows, and when the flows change from money in to money out more than once, which can give more than one valid rate. The calculator flags that case too.

Comparing with a benchmark and with inflation

A return means little without something to compare it with. Enter a benchmark rate and the calculator shows how much ahead or behind you are, both as a rate and in dollars. For CAGR it grows the starting value at the benchmark rate. For IRR it takes every deposit and withdrawal and carries it forward to the final date at the benchmark rate, so the dollar gap reflects the actual timing of your money.

Choose a benchmark that matches the risk you took. Comparing a portfolio of stocks with a savings account flatters the stocks. Comparing a bond fund with a stock index makes the bond fund look poor. The inflation setting turns a nominal rate into a real one: 10.29% a year with 2.5% inflation is 7.6% in real terms, which is the growth in buying power.

Reading your result

Start with the headline rate, then check it against three things. First, the length of the period: a rate earned over two years says much less than one earned over twenty. Second, the benchmark: a rate that beats a comparable index is evidence of skill or luck, and a rate that trails it is a cost of choosing something different. Third, inflation: the real rate is the one that changes what you can buy.

The rule of 72 gives a quick check on doubling time: divide 72 by the percentage rate. At 10.29% a year, that is roughly 7.0 years, close to the exact 7.1 years the calculator shows. It is a mental shortcut rather than a substitute for the calculation.

Remember that a rate describes the past. A high CAGR over a period that began at a market low and ended at a high reflects those starting and ending points as much as the investment itself. Shifting the start or end date by a year can change the answer a lot, so look at several periods before drawing conclusions.

Where IRR is the right tool

Use the IRR option whenever the timing of your money matters. Typical cases are a brokerage account where you add money regularly, a rental property with purchase costs, annual income and a sale at the end, a side business that needed investment up front and pays out irregularly, or a private fund that called capital in stages and returned it in pieces.

To build the list, go through your records and enter each deposit with its date as Money in, and each withdrawal, dividend paid out to you or sale with its date as Money out. Dividends that were reinvested stay inside the account and do not need a row. Then add the account's current value as a final Money out row dated today. If you are comparing two investments, use the same end date for both so the periods line up.

For regular monthly contributions, a list of twenty-four rows is the limit here. If you have more, group them: add the contributions for each quarter as one row on the quarter's middle date. That changes the answer very slightly and keeps the list readable.

Assumptions and limitations

• Dates and days. Years are days divided by 365. Leap days add a small difference compared with a calendar-year count.
• One rate for the whole period. CAGR and IRR both compress a bumpy history into one number. They say nothing about the worst year or the risk taken.
• Reinvestment. IRR implicitly assumes money withdrawn earlier could have earned the same rate afterwards. If that is unrealistic, the IRR overstates the outcome.
• Taxes and fees. Not modelled. Use after-tax and after-fee values if you want an after-tax result.
• Dividends. Include reinvested dividends in the ending value, or enter cash dividends as Money out on their dates.
• Benchmarks and inflation. Both are rates you enter. They are not forecasts.
• Not advice. The tool describes what happened; it does not predict what comes next.

Common mistakes

Using CAGR when you added money. If you contributed during the period, the ending value includes your deposits. Use IRR.

Forgetting the final value. IRR needs money out. If you are still invested, add today's value as a final Money out row.

Mixing up the signs. Deposits are Money in and withdrawals are Money out. Entering everything as Money in gives no answer.

Averaging yearly returns. Use the compound rate.

Comparing IRR with a fund's published return. One is money-weighted, the other time-weighted. They are not the same measurement.

Annualizing a few months. The result is easy to compute and easy to misread.

Frequently asked questions