CAGR Calculator
Find the compound annual growth rate between a starting and an ending value, or solve for the ending value, the starting value or the years.
CAGR is the steady yearly growth rate between a starting and an ending value: divide the end by the start, raise that to the power of 1 over the number of years, and subtract 1. An investment that grew from $10,000 to $16,000 in 5 years grew 60% in total, a CAGR of 9.86% a year.
This calculator turns the values you enter into a compound annual growth rate for general education. It does not know what you own, how risky it is, or how it is taxed, and it is not financial advice, investment advice, tax advice or a recommendation to buy, sell or hold anything. A past growth rate does not predict a future one, and CAGR is a smoothed figure, not what happened in any single year. Results leave out fees, taxes, inflation and money added or withdrawn unless you build them into the values you enter. Consult a qualified financial or tax professional about your own situation.
Compound annual growth rate
9.86% a year
- Starting value
- $10,000.00
- Ending value
- $16,000.00
- Years
- 5.00
- Growth rate (CAGR)
- 9.86%
- Total growth
- 60.00%
- Ending value as a multiple of the start
- 1.6x
CAGR is a smoothed yearly rate between two end points. It does not show the ups and downs in between, and it ignores money added or taken out.
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About the CAGR Calculator
A total return says how much something grew, but not how fast, so two investments held for different lengths of time cannot be compared on it. CAGR answers that by asking what single yearly rate, compounded, would turn the starting value into the ending value over the same years. FINRA gives the formula for this annualized return as 1 plus the total return, raised to the power of 1 over the years, minus 1. In its example a 31% return over 3 years works out to 9.42% a year. The same relationship runs in every direction, so the calculator can also find an ending value, the starting value you would need, or how long growth takes: $10,000 growing at 7% a year for 10 years reaches $19,671.51, and at 7% a year, money doubles in 10.24 years. CAGR is a smoothed figure. It hides the swings from year to year and does not account for deposits, withdrawals, fees or taxes, so it describes a past path rather than predicting a future one.
Frequently asked questions
How is CAGR different from an average annual return?+
An average of yearly returns adds them up and divides, which overstates growth when returns swing. A year up 50% and then a year down 50% averages 0%, yet $100 ends at $75, a CAGR of -13.40% a year.
Can CAGR be negative?+
Yes. When the ending value is below the start, the rate is negative: $10,000 falling to $6,000 over 4 years is a CAGR of -11.99% a year.
What does CAGR leave out?+
Everything between the two end points. It assumes no money was added or taken out, and it does not show volatility, fees, taxes or inflation. For an account with regular deposits, a money-weighted return, such as an internal rate of return (IRR), which accounts for the timing of each deposit, is the better measure.
How do I find how many years growth will take?+
Choose Years, then enter the start, the target and the rate. The calculator divides the natural log of the end over the start by the natural log of 1 plus the rate. At 7% a year, doubling takes 10.24 years.
Annualized return as (1 + return)^(1 / years) - 1, with a 31 percent return over three years annualizing to 9.42 percent: FINRA, Evaluating Performance. CAGR applies it to the total return end / start - 1.
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