CAGR calculator
Find the compound annual growth rate between two values, or project a value forward.
- ๐บ๐ธ US federal & state rules
Compound annual growth rate
+10.29%
$10,000.00 to $18,000.00 over 6 years
- Total return
- +80%
- Simple average per year
- +13.33%
- Gain
- $8,000.00
This is an example. Enter your numbers above and press the button to see your own result.
Path at a steady CAGR
| Year 1 | $11,029.24 |
|---|---|
| Year 2 | $12,164.40 |
| Year 3 | $13,416.41 |
| Year 4 | $14,797.27 |
| Year 5 | $16,320.26 |
| Year 6 | $18,000.00 |
- CAGR smooths the path. It does not show the ups and downs in between, and it ignores deposits or withdrawals made along the way.
Show the math
| Ratio | $18,000.00 รท $10,000.00 = 1.8 |
|---|---|
| CAGR | 1.8^(1 รท 6) - 1 = 10.292% |
What to do next
How it works
CAGR is the steady yearly rate that would take the starting value to the ending value in the given time. The calculator divides the end by the start, raises that ratio to 1 over the number of years, and subtracts 1.
In future value mode it runs the other way: start ร (1 + rate)^years.
Things to keep in mind
Two investments with the same CAGR can have very different rides. One may rise steadily while the other drops 30% and recovers. CAGR alone does not show that risk.
Frequently asked questions
What is the CAGR formula?
CAGR = (ending value รท starting value)^(1 รท years) - 1. Going from $10,000 to $20,000 in 5 years is 2^(1/5) - 1, about 14.87% a year.
Why is CAGR lower than the average yearly return?
A simple average ignores compounding. Doubling in 5 years is a 20% simple average, but only 14.87% a year when compounded.
Can CAGR be negative?
Yes. If $100 falls to $50 over 2 years, the CAGR is about -29.3% a year.
Does CAGR work if I added money along the way?
Not well. CAGR assumes one starting amount and no deposits. For regular contributions, use the compound interest calculator instead.