// ABSOLUTE RETURN → CAGR

Absolute Return to CAGR Calculator

Convert a total return percentage into the equivalent compound annual growth rate.

// INPUTS

TOTAL (ABSOLUTE) RETURN (%)

The total gain over the whole period.

NUMBER OF YEARS (years)

// OUTPUT

ANNUALIZED RATE (CAGR)

25.99%

GROWTH MULTIPLE4.00×

TOTAL RETURN300.00%

// FORMULA

CAGR = (1 + AbsoluteReturn) ^ (1 / Years) − 1

Absolute return is expressed as a decimal: 300% = 3.

// EXAMPLE

// WORKED OUT

Total return of 300% over 6 years:
  CAGR = (1 + 3) ^ (1 / 6) − 1
       = 4 ^ 0.1667 − 1
       = 0.2599
       = 25.99% per year

// WHAT THIS MEANS

A '300% gain' over 6 years sounds very different from a '25.99% per year' return, but they are the same thing. Absolute return is the total change over the whole period; CAGR is the steady annual rate that would produce that change. Annualizing is what lets you compare an investment held for 11 months against one held for 9 years.

// FAQ

What if my total return is negative?+

If the loss is greater than 100%, CAGR is undefined (you cannot lose more than everything). For any loss less than 100%, the formula works and CAGR will be negative.

Is CAGR always lower than the absolute return?+

For periods longer than one year and positive returns, yes — that's because compounding spreads the gain over the years.

Should I use 4 or 4.0 if my investment is up 4×?+

If you grew by 4×, the absolute return is 300%, not 400%. Enter 300 in this calculator.