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CAGR Calculator

Legal basis: SEC Regulation S-K Item 301 (average annual percentage growth rate disclosure); CAGR is a general financial convention, not a statutory measure · checked 2026-10-04 · Rates and limits change — verify the current figures.

Compound annual growth rate, or CAGR, is the constant yearly growth rate that would carry a beginning value to an ending value over a given span. It answers the question a raw percentage gain hides: a fund that doubles in three years and one that doubles in twelve both returned 100%, but they are not comparable investments. Smoothing the path into a single annual rate makes different time spans, different investments and different business metrics comparable on one scale.

The formula is CAGR = (ending value ÷ beginning value) ^ (1 ÷ years) − 1. If an account grows from $10,000 to $16,000 in five years, the ratio is 1.6, the fifth root is about 1.0986, and the CAGR is roughly 9.9% per year. Alongside the rate, this tool reports the total percentage return over the whole period and the absolute gain in dollars, because a high percentage on a small base can matter less than a modest percentage on a large one.

For comparison the calculator also shows doubling time. The rule of 72 is a mental shortcut that estimates the years to double as 72 divided by the annual growth percentage; at 9.9% it suggests about 7.3 years, while the exact logarithmic answer is ln(2) ÷ ln(1.099), or about 7.3 years as well. The rule is accurate for mid-single-digit rates and drifts slightly at extremes, which is why both figures are shown.

Know the limits. CAGR describes only the endpoints, so it erases volatility: two investments with the same CAGR can have taken very different routes, with very different risk and very different year-to-year tax consequences. It also assumes the growth is plausibly smooth, which revenue and stock prices rarely are, and it ignores deposits and withdrawals, so it is only meaningful when the beginning and ending values bracket a single uninterrupted position. This is an educational estimate for planning, not investment or tax advice; consult a qualified professional before acting on it.

Calculate

CAGRsmoothed annual rate between the two values9.86%

Total return over the period1.60x the starting value60.0%

Absolute gainending value minus beginning value$6,000

Rule-of-72 doubling time72 divided by the CAGR percentage — an approximation7.3 years

Exact doubling timeln(2) ÷ ln(1 + CAGR) at this rate7.4 years

Benchmark comparisonCAGR minus the 7.0% benchmark; benchmark doubles in 10.3 years by rule of 722.86%

Value after one more year at this CAGRprojection, not a prediction$17,577

How the math works

CAGR = (ending value ÷ beginning value) ^ (1 ÷ years) − 1.
Total return = (ending value ÷ beginning value) − 1, expressed as a percentage.
Absolute gain = ending value − beginning value.
Rule-of-72 doubling time = 72 ÷ (CAGR × 100); exact doubling time = ln(2) ÷ ln(1 + CAGR).

Frequently asked questions

What is CAGR and how is it calculated?

Compound annual growth rate is the constant annual rate that grows a beginning value into an ending value over a set period. It equals (ending ÷ beginning) ^ (1 ÷ years) − 1. It smooths a multi-year change into one comparable yearly figure.

Why use CAGR instead of the total return?

Total return depends on how long you held. Doubling in three years and doubling in twelve are both 100% total returns, but their CAGRs are about 26% and 6% per year. CAGR puts different holding periods on the same annual scale.

Does CAGR account for volatility?

No. CAGR looks only at the endpoints, so a smooth climb and a wild ride with a crash in the middle can share the same CAGR. For risk-aware comparisons you also need variability measures such as standard deviation or maximum drawdown.

Does CAGR work with deposits and withdrawals?

Not directly. Adding or withdrawing money changes the ending value without any growth, which distorts the rate. Use the money-weighted return (internal rate of return) when cash flows occurred during the period.

What is the rule of 72?

A shortcut that estimates the years needed to double as 72 divided by the annual growth percentage. At 8% per year, roughly 9 years. It is most accurate in the mid-single digits and slightly off at very high or very low rates, which is why the exact doubling time is shown alongside.

Can CAGR be negative?

Yes. If the ending value is below the beginning value but still positive, the CAGR is negative. If the ending value is zero or the beginning value is zero, no meaningful rate exists and the calculator shows no result for that row.

Is a higher CAGR always better?

Not by itself. It ignores risk, volatility, taxes and the size of the base. Compare CAGRs only across similar assets or business metrics over similar periods, and treat this tool as an educational estimate, not investment advice.

This calculator is an educational estimate for planning purposes only. It is not investment, tax or legal advice, growth assumptions vary by market and jurisdiction, and past growth does not predict future results. Consult a licensed attorney, CPA or qualified financial professional before acting on any figure it produces.