What CAGR answers
CAGR is not the return of any single year. It is the constant annual rate that would take your starting value to your ending value over the period.
Because it uses only three inputs — start, end and years — it puts a one-year holding and a three-year holding on the same scale.
Formulas
(final value − initial investment) ÷ initial investment × 100%(final value ÷ initial investment)^(1 ÷ years) − 1ln(2) ÷ ln(1 + CAGR)Worked example (recompute it yourself)
Invest 2,500 USDT; three years later it is worth 4,000 USDT.
ROI = (4,000 − 2,500) ÷ 2,500 × 100% = 60%.
CAGR = (4,000 ÷ 2,500)^(1 ÷ 3) − 1 = 1.6^(1 ÷ 3) − 1 ≈ 16.96%.
Dividing 60% by three gives 20%, but that is a simple-interest convention. Only 16.96% compounded for three years lands exactly on 1.6x.
How long to double, by rate
10% a year → about 7.27 years to double; 20% → about 3.80; 30% → about 2.64; 50% → about 1.71.
Run the same formula on this page's example: 16.96% corresponds to roughly 4.42 years to double.
Notes
CAGR assumes returns compound evenly. The highs and drawdowns along the actual path do not appear in the number.
For a holding period under a year, enter years as a decimal (six months is 0.5). The annualised figure is a conversion convention, not a repeatable return.
This is arithmetic conversion only. We do not predict prices and nothing here is a forecast.
FAQ
How is CAGR different from ROI?
ROI is the cumulative return over the whole holding period and ignores duration. CAGR restates that return as a per-year compounded level so different periods can be compared.
Why is CAGR lower than ROI divided by years?
Because compounding rolls period by period. A 60% total over three years is 16.96% a year, not 20%: 1.1696³ ≈ 1.6 brings you back to the 60% total.
How do I work out doubling time?
Years = ln(2) ÷ ln(1 + CAGR). At 20% a year that is about 3.80 years; at 10% it is about 7.27 years.