CAGR calculator
Enter start, end and years, get the annual growth rate.
How do I calculate CAGR?
CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1. $10,000 growing to $20,000 in 5 years is 2^(1/5) − 1 = 14.87% a year.
What does CAGR tell me?
The steady yearly rate that would take the starting value to the ending value. Real growth is usually uneven; CAGR smooths it into one number.
Is CAGR the same as average return?
No — the simple average of yearly returns is higher when returns vary. A +50% year and a −50% year average 0%, but the value falls by 25%, a CAGR of -13.4%.
Can I use part of a year?
Yes — enter 2.5 years, for example. The table shows the value at the end of each year at the CAGR.
What about deposits and withdrawals?
CAGR assumes nothing was added or taken out. With regular contributions, use the compound interest or future value calculator.
How many years do I enter for 2019 to 2024?
Five. Count the time between the two dates, not the number of year labels: a value at the end of 2019 and another at the end of 2024 are five years apart, and entering six would understate the rate. If the dates are not exact anniversaries, use a decimal such as 4.6 years.
How do I find the ending value from a CAGR?
Turn the formula around: ending value = starting value × (1 + CAGR)^years. $10,000 at 7% a year for 10 years becomes $10,000 × 1.07¹⁰ = $19,671.51.
How the formula works
If a value grows by the same rate each year, it ends at start × (1 + rate)ⁿ after n years. CAGR is that rate worked backward from the two end values: divide the ending value by the starting value, take the nth root, and subtract 1. Only the first and last values enter the formula, so what happened in between has no effect on the answer. Both values must be above zero, and the years must be above zero, or the rate is not defined.
Worked example: $10,000 to $20,000 in 5 years
The value doubles, so the ratio is 2.0 and the fifth root of 2 is 1.1487; subtracting 1 gives a CAGR of 14.87%. Checking forward at that rate: $11,487 after year 1, $13,195 after year 2, $15,157, $17,411, and $20,000 after year 5. Dividing the total gain of 100% by 5 years would give 20% a year, which overstates the rate because it ignores compounding.
Common mistakes
Counting year labels instead of elapsed years, as in the 2019 to 2024 question above, is the most frequent error. Using CAGR on a balance that received deposits or paid withdrawals is the second: the formula reads every dollar of growth as return, so the answer is wrong. Choosing the end dates also matters, since a window that starts at a low point and ends at a high point produces a much larger CAGR than the same asset over other dates. Finally, one smooth number hides the path. The SEC notes that two funds with the same average yearly return can have very different year-to-year patterns, so look at volatility and the worst year too, and remember that past results do not guarantee future ones.
Sources: the formula is the compound-growth identity, ending value = starting value × (1 + rate)ⁿ, solved for the rate. SEC, Mutual Fund Investing: Look at More Than a Fund’s Past Performance (May 7, 2007), on why past results and yearly patterns need more than one number. To add regular deposits, use the future value calculator or the compound interest calculator; to take out inflation, the real return calculator; for the time it takes to double, the rule of 72 calculator.
Estimates for planning only — not financial advice. How we check our calculators.