CAGR Calculator

How it works

The compound annual growth rate is the single steady yearly rate that would turn the starting value into the ending value over the period, if growth had compounded once a year at the same pace. It smooths out the ups and downs along the way, so it describes the overall result, not any one year.

Total return is the plain percentage change from start to end. CAGR spreads that change across the years: a 100% total return over ten years is a CAGR of 7.18%, not 10%, because each year's growth builds on the last.

When you enter two dates, the time between them is counted in days and divided by 365, the same convention a spreadsheet's XIRR function uses, so a fraction of a year counts for exactly what it is.

Switch to finding the ending value to project forward: it applies a growth rate you choose to the starting value for the same length of time.

Formula

CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1
total return = ending value ÷ starting value − 1
ending value = starting value × (1 + CAGR)^years
years from dates = days between them ÷ 365

Example

$10,000 that grows to $18,000 over 5 years has a total return of 80% and a CAGR of 12.47% a year: 1.8^(1/5) = 1.1247.

An investment of $10,000 worth $11,000 after 8 years grew at a CAGR of 1.20% a year.

Projecting $10,000 forward at an assumed 7% a year for 5 years gives $14,025.52.

Assumptions and limitations

• The investment is a single lump sum with no money added or taken out along the way. If you made contributions or withdrawals, use the investment return calculator, which accounts for the timing of each one.
• CAGR describes what happened, smoothed. It says nothing about how bumpy the path was, and a past growth rate is not a forecast. A growth rate you enter to project forward is your assumption.
• Dividends, interest, fees and taxes count only if they are reflected in the values you enter.
• The result is for information and planning and is not financial, tax or investment advice.

Frequently asked questions