CAGR Calculator: Compound Annual Growth Rate
Find the compound annual growth rate of any investment, project future values, or calculate how long to reach a target.
📊 What is CAGR (Compound Annual Growth Rate)?
Compound Annual Growth Rate (CAGR) is the standard metric for measuring investment performance over multi-year periods. It represents the constant annual rate at which an investment would need to grow, with compounding, to reach its ending value from its starting value over a given number of years. Because it smooths out volatile year-to-year fluctuations into a single representative rate, CAGR is far more informative than a simple average of annual returns when evaluating any investment that compounds over time.
CAGR is used everywhere in finance and business: mutual fund and ETF performance is quoted as 1-year, 3-year, 5-year, and 10-year CAGR; company revenue growth is described as CAGR in annual reports and analyst presentations; market size forecasts use CAGR to project where a sector will be in 5 or 10 years; venture capital funds report fund performance as CAGR (IRR for deals with multiple cash flows); and personal investors use CAGR to compare their portfolio performance against index benchmarks.
One of the most important things to understand about CAGR is the difference between arithmetic and geometric means. If a stock gains 50% in year 1 and loses 33% in year 2, the arithmetic average return is (50 - 33) / 2 = 8.5%, but the true CAGR is 0% because you end up where you started. CAGR always reflects the geometric compounding reality of investing, not the misleading arithmetic average that fund managers sometimes quote to make performance look better than it is.
This calculator solves CAGR three ways: given start and end values you can find the CAGR; given a starting value and CAGR you can project a future ending value; and given start and end values plus a target CAGR you can find how many years it takes to reach a goal. The calculator also shows the Rule of 72 doubling time, total return percentage, net gain, and investment multiple for each scenario.
📐 Formula
CAGR = (End Value ÷ Begin Value)1/n − 1
End Value = investment value at the end of the period (include reinvested dividends for total return CAGR)
Begin Value = investment value at the start of the period
n = number of years in the holding period
Find Ending Value: End Value = Begin Value × (1 + CAGR)n
Find Years Needed: n = ln(End / Begin) ÷ ln(1 + CAGR)
Rule of 72 (doubling time): Years to double = 72 ÷ CAGR%
Example (Find CAGR): $10,000 grows to $18,000 in 5 years. CAGR = (18,000 / 10,000)^(1/5) - 1 = 1.8^0.2 - 1 = 12.47% per year.
Example (Find End): $10,000 at 10% CAGR for 10 years = $10,000 x 1.10^10 = $25,937.
📖 How to Use This Calculator
Steps
1
Choose a mode: Find CAGR to measure an investment's annualized return. Find Ending Value to project how much a current holding will grow. Find Years Needed to plan how long it takes to reach a savings goal.
2
Enter values using sliders or text fields: All inputs accept typed numbers or slider interaction. For Find CAGR, enter the beginning and ending value of your investment plus the number of years held. Include reinvested dividends in the ending value to get total return CAGR.
3
Click Calculate: Results appear instantly. The primary result (CAGR, ending value, or years) appears prominently, with supporting metrics below.
4
Check the doubling time: The Rule of 72 doubling time tells you how many years at this CAGR it takes to double your money. It is a useful mental benchmark for evaluating whether a return is genuinely strong.
5
Compare and share: Use the Copy Link button to save your specific calculation. Try different scenarios with the sliders to see how small differences in CAGR dramatically change long-term outcomes through the power of compounding.
💡 Example Calculations
Example 1: Find CAGR for a Stock Portfolio
Portfolio grew from $50,000 to $112,000 including dividends reinvested over 8 years
1
Starting value: $50,000. Ending value: $112,000 (including dividends). Years: 8.
2
CAGR = (112,000 / 50,000)^(1/8) - 1 = 2.24^0.125 - 1 = 0.1061 = 10.61% per year.
3
Total return = (112,000 - 50,000) / 50,000 x 100 = 124%. Net gain = $62,000. Multiple = 2.24x. Doubling time at 10.61% = 6.8 years.
CAGR = 10.61% / year. Total return: 124% over 8 years.
Try this example →Example 2: Project Ending Value for a Retirement Account
Current retirement balance $75,000 invested at an assumed 8% CAGR for 20 years
1
Starting value: $75,000. CAGR assumption: 8% per year. Years: 20. (No additional contributions in this scenario.)
2
Ending Value = $75,000 x (1.08)^20 = $75,000 x 4.661 = $349,556.
3
Net gain = $274,556. Total return = 366%. Multiple = 4.66x. Doubling time at 8% = 9 years (money doubles twice in 18 years).
Ending Value = $349,556 after 20 years at 8% CAGR.
Try this example →Example 3: Find Years Needed to Reach a Savings Goal
How long to grow $30,000 to $100,000 at a 10% CAGR?
1
Starting value: $30,000. Target ending value: $100,000. Assumed CAGR: 10% per year.
2
Years = ln(100,000 / 30,000) / ln(1.10) = ln(3.333) / ln(1.10) = 1.204 / 0.0953 = 12.63 years.
3
Total gain = $70,000 (233% return). At 8% CAGR it would take 15.9 years. At 12% it would take 10.5 years.
Years needed = 12.6 years at 10% CAGR to turn $30,000 into $100,000.
Try this example →❓ Frequently Asked Questions
What does CAGR mean in simple terms?
CAGR (Compound Annual Growth Rate) is the smoothed annual return of an investment over multiple years. If your investment grew at different rates each year but ended up at a specific final value, CAGR tells you the single constant rate per year that would have produced the same result. It lets you fairly compare investments held for different lengths of time or with volatile year-to-year returns.
What is the CAGR formula?
CAGR = (End Value / Begin Value)^(1/n) - 1. Where n is the number of years. Express as a percentage by multiplying by 100. Example: $5,000 growing to $8,000 in 4 years: CAGR = (8,000/5,000)^(1/4) - 1 = 1.6^0.25 - 1 = 0.1247 = 12.47% per year.
What is a good CAGR for stocks?
The S&P 500 has produced roughly 10% nominal CAGR over long periods. Beating this benchmark consistently over 10 or more years puts an investor or fund in the top tier. Individual growth stocks can achieve 20% to 30% CAGR during their high-growth phases, but such rates rarely persist for more than 5 to 10 years. For context, Warren Buffett's Berkshire Hathaway generated approximately 20% CAGR over 50-plus years, which is considered extraordinary.
What is the Rule of 72 and how does it work?
The Rule of 72 is a mental math shortcut: divide 72 by the annual growth rate (CAGR%) to estimate how many years it takes to double your money. At 6% CAGR, money doubles in about 12 years (72/6=12). At 12%, it doubles in 6 years. At 24%, it doubles in 3 years. The rule is an approximation accurate to within 1% for rates between 2% and 30%.
Why is CAGR better than average annual return?
Average annual return (arithmetic mean) overstates performance when returns vary year to year. CAGR (geometric mean) reflects the actual compounding effect on your money. For example: +50% in year 1, -33% in year 2 gives arithmetic average of 8.5%, but your money is back to the starting point (CAGR = 0%). The arithmetic mean is misleading in this case. CAGR always correctly represents the actual annualized growth of invested capital.
How do I use CAGR to compare mutual funds?
Compare the CAGR of competing funds over the same period (3-year, 5-year, or 10-year). A fund with higher CAGR over a longer period (5 or 10 years) has demonstrated more consistent outperformance than one with a good 1-year figure. Always compare to the category benchmark: a large-cap equity fund should be compared to the S&P 500, not to a bond fund. After comparing CAGR, also look at volatility (standard deviation) and maximum drawdown to understand the risk taken to achieve that return.
What is the difference between CAGR and total return?
Total return is the overall percentage change from start to end: (End - Begin) / Begin x 100. CAGR is the annualized rate that produces that total return through compounding. A 100% total return over 10 years corresponds to a CAGR of 7.18% per year. Total return describes the entire gain; CAGR describes the annual pace. Both are valid measures and this calculator shows both together.
Can CAGR be used for GDP and economic growth?
Yes. CAGR is the standard way to describe economic growth rates. US GDP grew from roughly $13 trillion in 2005 to $25 trillion in 2022, a CAGR of about 3.9% per year in nominal terms. Real GDP CAGR (inflation-adjusted) was lower. Country-level economic reports, IMF projections, and World Bank data all use CAGR for multi-year growth comparisons.
What happens to CAGR if years = 1?
When n = 1, CAGR equals simple total return. CAGR = (End/Begin)^(1/1) - 1 = End/Begin - 1. There is no compounding effect since there is only one period. CAGR only differs meaningfully from simple return when n is greater than 1, which is when compounding across multiple periods makes the geometric mean different from the arithmetic mean.
Does CAGR include dividends?
The CAGR formula is neutral on dividends: it depends on what you enter as the ending value. If you enter only the price appreciation (no dividends), you get price-return CAGR. If you add all dividends received (or use the value of shares if dividends were reinvested), you get total-return CAGR. Total-return CAGR is almost always higher and is the correct measure of actual investment performance, since it reflects all cash flows returned to the investor.
What is the CAGR of the S&P 500?
The long-run nominal CAGR of the S&P 500 (including dividends reinvested) is approximately 10% to 10.7% per year based on historical data going back to 1926. Inflation-adjusted (real) CAGR is roughly 7%. Over any specific 10-year or 20-year period, actual CAGR varies significantly depending on start and end dates. The 2010s decade produced over 13% CAGR; the 2000s decade (including two major crashes) produced negative CAGR for the first time since the 1930s.
What are the limitations of CAGR?
CAGR has three main limitations. First, it only uses the starting and ending values, ignoring the path of returns in between: a highly volatile investment and a smooth one can have identical CAGR but very different risk experiences. Second, it assumes no intermediate cash flows (no dividends taken as cash, no additional contributions); for those, use IRR. Third, past CAGR does not predict future CAGR: an industry or stock with 20% CAGR over the past 5 years may be in a mature or declining phase going forward.