CAGR Calculator
Calculate the compound annual growth rate between a starting and ending value over a number of years.
Compound annual growth rate is the single constant yearly rate that would take a starting value to an ending value over a given period, and this CAGR calculator solves for it directly. It is the standard way of expressing investment growth as a per-year figure.
Formula: CAGR = (ending ÷ beginning)^(1 ÷ years) − 1
Your figures
Results
CAGR
+14.87%
compound annual growth rate
- Total return over the period
- +100.00%
- Absolute change
- +US$10,000.00
- Value multiple
- 2.000×
- Years to double at this rateCalculated exactly, not with the rule of 72.
- 5.0
What this means
Growing from US$10,000.00 to US$20,000.00 over 5.00 years is equivalent to +14.87% a year compounded. CAGR smooths the path completely — the actual year-to-year returns could have been far more volatile than this single rate suggests.
- CAGR does not account for money added or withdrawn during the period. Use a money-weighted return for that.
- It describes past growth. It is not a projection of future returns.
CAGR: +14.87%
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About the CAGR calculation
Its usefulness comes from compounding. Growing 100% over five years is not 20% a year — it is about 14.87%, because each year's growth builds on the previous year's.
As an annualised return calculator it also reports the total return over the period and how long a doubling would take at the rate it finds.
CAGR formula
CAGR = (ending value ÷ beginning value) ^ (1 ÷ years) − 1
total return = (ending ÷ beginning − 1) × 100
years to double = ln(2) ÷ ln(1 + CAGR)- ^
- Raised to the power of.
- ln
- Natural logarithm.
- years
- The period covered. Fractional years are supported.
Taking the ratio of ending to beginning value gives the total growth multiple. Raising it to the power of one over the number of years finds the rate that, compounded that many times, produces the same multiple.
CAGR smooths the path entirely. Two investments that both went from $10,000 to $20,000 over five years have identical CAGR whether one rose steadily or fell 40% before recovering. It says nothing about volatility.
Doubling time is calculated exactly using logarithms rather than with the rule of 72, which is a useful approximation but drifts at higher rates.
CAGR: a worked example
An investment growing from $10,000 to $20,000 over five years.
- Growth multiple20,000 ÷ 10,000 = 2.000
- Exponent1 ÷ 5 = 0.2
- CAGR2 ^ 0.2 − 1 = 0.148698 = 14.87%
- Total return100.00%
- Years to double at 14.87%ln(2) ÷ ln(1.1487) = 5.0 years
14.87% a year compounded. Note that this is well below the 20% that dividing the 100% total return by five years would suggest.
How to use the CAGR calculator
- Enter the value at the start of the period and the value at the end.
- Enter the number of years between them. Fractional years are supported — 18 months is 1.5.
- For an investment with deposits or withdrawals during the period, CAGR will not reflect the return accurately. A money-weighted return is the right measure there.
Limitations of the CAGR calculator
Every calculation makes assumptions. These are the ones that matter here.
- Ignores everything that happened between the two endpoints, including volatility and drawdowns.
- Does not account for money added or withdrawn during the period.
- Excludes fees, tax and inflation. Real returns after all three are materially lower.
- A past growth rate is not a projection. Extrapolating it forward assumes conditions that produced it persist.
Frequently asked questions about CAGR
Why isn't CAGR just the total return divided by the number of years?
Because growth compounds. Each year's return is earned on the balance including previous years' gains, so the annual rate needed is lower than the simple division suggests.
What is the difference between CAGR and an average yearly return?
CAGR is a geometric mean and accounts for compounding. An arithmetic average yearly return ignores it and overstates growth whenever returns vary — a +50% year followed by a −50% year averages 0% arithmetically but is a 13.4% annual loss.
Can an annual growth rate calculator handle periods shorter than a year?
Yes. Enter the period as a fraction — three months is 0.25 — and the result is the rate that, compounded across a full year, would produce the same growth. Short periods annualise to large numbers, so read them with that in mind.
Can CAGR be negative?
Yes. If the ending value is below the beginning value, the rate is negative. The calculator requires both values to be above zero, since a total loss has no meaningful growth rate.
Why not use the rule of 72 for doubling time?
The rule of 72 is a good approximation around 8% but drifts at higher and lower rates. This calculator uses the exact logarithmic formula.
Last reviewed . See our methodology and editorial policy.
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