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Enter your starting value, ending value and number of years. See the smoothed annual growth rate that turns one into the other. Free, no signup.
Compound annual growth rate is the steady yearly rate that would turn a starting value into an ending value over a chosen period. Divide the ending value by the starting value, raise the result to the power of one divided by the number of years, then subtract one. Growth from $10,000 to $16,105 over five years is a CAGR of 10%. The free StockEducation CAGR Calculator can solve for any missing value when the other three are entered. CAGR smooths all gains and losses into one figure, so it does not show volatility or the result in any single year.
Enter the starting value, ending value and number of years. The calculator shows the smoothed annual growth rate.
Enter your values and click Calculate CAGR.
General education only — check the assumptions before using the result.
Purpose: This calculator is a general educational tool that performs a numerical calculation from the values you enter. It does not recommend, advertise or promote a specific financial product.
Assumptions: The calculation uses the input values and assumptions displayed in the calculator. Default values are illustrative starting points, not forecasts. Change each non-statutory assumption so it matches the scenario you want to test.
Limitations: Actual market returns, prices, dividends, interest rates, fees, tax, inflation and timing may differ from the assumptions. The calculator may omit factors relevant to you. Small input changes can materially change the result, so the output is an illustration rather than a prediction.
This financial calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. You should consider obtaining advice from a financial services licensee before making any financial decisions.
You can print this page or save it electronically using your browser controls. See ASIC Instrument 2026/41 for the conditions applying to generic financial calculators.
Disclaimer · Terms of Use
Educational estimate only. CAGR smooths returns into one annual rate. It does not show year-by-year volatility, taxes, fees or future performance.
A $10,000 investment that grew to $20,000 over 5 years has a CAGR of 14.87%, meaning it averaged about 14.87% growth each year on a compounded basis. CAGR (Compound Annual Growth Rate) is the constant annual rate at which an investment would have grown if it compounded smoothly over the period. It is the standard way to compare investments across different time horizons.
Annualised growth rate from any two values in three steps.
Use the total return value if you have it (price plus reinvested dividends), or price only if that is what you want to measure.
Use the actual elapsed years between the two values. CAGR works best over three years or more. Shorter periods can produce misleadingly extreme rates.
The result card shows the compound annual growth rate and a one-line summary like “$10,000 to $20,000 over 5 years equals a CAGR of 14.87%.” A CAGR is meaningful only relative to a benchmark — compare to a broad index over the same period to judge whether the rate is strong, weak or average.
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Specific outcomes, not generic claims.
CAGR puts investments held for different lengths of time on the same annualised footing, which is the only fair way to compare.
Year to year returns are noisy. CAGR collapses the entire sequence into a single rate that is much easier to interpret and benchmark.
Historical CAGR ranges give you defensible planning numbers. Long run equity CAGR of 7% real is far more credible than a vibes based 12%.
Most calculators hide the formula. We show it because understanding the math is the point.
The geometric mean return formula, written out with plain English variable names.
Ending Value
Starting Value
n
CAGR
The projection is a mathematical model, not a forecast. Six assumptions baked into the math, plus what real outcomes look like.
Each card pairs an assumption the calculator makes with what real world investing actually looks like.
Reality: CAGR assumes one lump sum at the start. If you added or withdrew money during the period, use IRR instead.
Reality: CAGR uses one end date. If you sold across multiple dates, blend them or use IRR.
Reality: A 9% CAGR can come from a smooth ride or a wild one. CAGR ignores the path.
Reality: If starting and ending values are gross of fees, CAGR is gross too. Subtract expense ratios for real CAGR.
Reality: Dividend tax along the way and capital gains tax at sale both reduce after tax CAGR.
Reality: CAGR is nominal by default. Subtract long run inflation (roughly 3 points) for real CAGR.
Same base scenario, one variable changed at a time. The projection is highly sensitive to small changes.
The calculator assumes a smooth return every year. Here is how that compares to verified historical data.
Written by Dr. Charles Lo, Associate Professor, CPA. Reviewed annually.
Compound Annual Growth Rate is the geometric average annual return of an investment over a specified period. It answers a simple question: what single fixed rate, compounded each year, would turn the starting value into the ending value? That single rate is more useful than the simple arithmetic average because it accounts for compounding.
Two investments can have the same arithmetic average return but very different ending balances if one is more volatile. A portfolio returning 40% one year and losing 20% the next has a simple average of 10%, but its CAGR is only 5.83% because the compounded outcome is what actually shows up in the account.
Use CAGR when you want a clean comparison across investments, funds or indexes. It works best over three years or more. Over very short periods CAGR can look misleading because a single big up or down year dominates. For investments with deposits or withdrawals during the period, use IRR instead.
Use total return values (price plus reinvested dividends) when comparing dividend payers to non payers. Most fund factsheets quote both.
When benchmarking, use the exact same period for both your investment and the benchmark. A fund’s 5 year CAGR is meaningless without knowing what the benchmark did over those 5 years.
A CAGR is good or bad only relative to a benchmark. Compare to a broad index over the same period. Long term diversified equity portfolios historically deliver roughly 7 to 10% nominal CAGR. Bond portfolios sit around 4 to 5%.
CAGR hides volatility. Always check the year by year returns alongside CAGR. Two portfolios with the same CAGR can have very different lived experiences and very different sequence of returns risk in retirement.
Real numbers calculated from the same formula as the live tool. Every figure below is verified, not approximated.
$10,000 to $20,000 over 5 years
An investor checks the annualised growth rate of a position they doubled in half a decade.
$50,000 to $135,000 over 15 years
A passive investor checks a broad market ETF position held since 2010.
$10,000 to $32,000 over 10 years
A hypothetical 10 year hold of a broad US equity index ETF during a strong decade.
$5,000 to $12,500 over 3 years
An investor evaluates a small cap that recovered sharply from a depressed base.
$25,000 to $35,000 over 7 years
An investor checks whether a bond fund kept pace with its asset class benchmark.
The questions users most often ask about calculator output.
Yes. The calculator is free to use, no signup or account required. It runs in your browser. Your inputs are not stored or shared.
Arithmetic mean adds yearly returns and divides by years. CAGR is the geometric mean: multiply the year on year growth factors and take the nth root. CAGR is almost always lower than the simple average when returns vary, and it more accurately reflects the actual account value.
Only if your starting and ending values reflect reinvested dividends. Price only values give a price only CAGR. Use total return values for a complete picture, especially when comparing dividend payers.
Long term US equity indexes have produced CAGRs in the 7 to 10% nominal range historically. Above 10% over a long period is excellent and likely came with higher volatility. Below 5% over a long period suggests a weak window, high fees, or both.
CAGR smooths everything into one number. A portfolio that gained 40% one year and lost 20% the next has very different volatility than one that gained 7% each year, even if both end at similar values. CAGR ignores the path and only reports the smoothed rate.
No. CAGR assumes a single starting investment and a single ending value. Internal Rate of Return (IRR) can handle multiple cash flows in and out across the period. For investments where you added or withdrew money along the way, IRR is more accurate.
Compound interest projects forward from inputs (rate, time, contributions). CAGR works backward from observed outcomes (start, end, time) to derive the equivalent rate. Same underlying math, opposite direction.
For comparing investments over the same period, nominal is fine because inflation affects both equally. For planning purchasing power decades out, use real CAGR by subtracting an inflation assumption from your historical figure.
Other tools for different parts of your financial picture.
The calculator uses the standard CAGR formula, which is the geometric mean of yearly returns. Historical asset class CAGR ranges referenced from publicly available primary aggregators of US equity and bond returns since 1928.
This calculator is provided for general educational purposes only. It does not constitute financial product advice and does not take into account your personal objectives, financial situation or needs. Historical CAGR does not reliably predict future returns. Past performance is not a reliable indicator of future results. Consider whether any general information is appropriate for you and seek independent licensed advice before making any investment decision.
This calculator gives you the number. Our free courses teach you the why behind the math, the assumptions to question, and how to apply it to your own portfolio.
Enter a starting value, ending value and time period to see the smoothed annual growth rate that turns one into the other.
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