Financial Calculators
CAGR Calculator - Compound Annual Growth Rate
Calculate the Compound Annual Growth Rate (CAGR) for any investment. Enter a start value, end value, and number of years to get the annualised growth rate, total return, and year-by-year growth table.
Value over time at 13.99% CAGR
| Year | Value | Gain from Start |
|---|---|---|
| Start | $10,000.00 | +$0.00 |
| Year 1 | $11,398.52 | +$1,398.52 |
| Year 2 | $12,992.63 | +$2,992.63 |
| Year 3 | $14,809.68 | +$4,809.68 |
| Year 4 | $16,880.85 | +$6,880.85 |
| Year 5 | $19,241.67 | +$9,241.67 |
| Year 6 | $21,932.67 | +$11,932.67 |
| Year 7 | $25,000.00 | +$15,000.00 |
What Is CAGR?
Compound Annual Growth Rate (CAGR) is the rate at which an investment would have grown each year if it had grown at a perfectly steady pace. Unlike a simple average, CAGR accounts for the compounding effect, making it the standard benchmark for comparing investments over different time horizons.
The CAGR Formula
CAGR = (End Value / Start Value)^(1 / n) − 1, where n is the number of years. Multiply by 100 to express as a percentage.
When to Use CAGR
Use CAGR when you want to compare the historical performance of two investments that may have had different timelines or when projecting what a current balance could be worth in the future at a given return rate.
CAGR vs. Average Annual Return
A simple average of annual returns overstates growth when returns vary year to year. CAGR (the geometric mean) gives the actual compounded rate and is a more accurate measure of real-world investment performance.
Historical CAGR reference
| Benchmark | Approx. 10-yr CAGR | Notes |
|---|---|---|
| S&P 500 (total return) | ~10.7% | Long-run average; individual decades vary |
| US total stock market | ~10.5% | Similar to S&P 500 |
| International developed stocks | ~6–8% | Lower but adds diversification |
| US aggregate bonds | ~2–4% | Lower volatility, lower returns |
| Real estate (REITs) | ~8–10% | Varies significantly by sector |
Data is approximate; always verify current figures from authoritative sources before making investment decisions.
The Rule of 72
The Rule of 72 gives a quick mental estimate for how long it takes an investment to double: divide 72 by the CAGR percentage.
| CAGR | Years to double (Rule of 72) |
|---|---|
| 4% | 18 years |
| 6% | 12 years |
| 8% | 9 years |
| 10% | 7.2 years |
| 12% | 6 years |
Real vs. nominal CAGR
The CAGR shown in financial reports is usually nominal - it does not account for inflation. To find the real (inflation-adjusted) CAGR, use the Fisher equation:
Real CAGR ≈ Nominal CAGR − Inflation rate
For example, a 10% nominal CAGR with 3% inflation gives an approximate real CAGR of ~7%. Over 30 years, this difference is enormous: $10,000 at 10% nominal becomes $174,494 but only $76,123 in today's purchasing power at 3% inflation. When comparing historical returns, always check whether figures are reported in real or nominal terms.