CAGR Calculator
Find the steady yearly growth rate that turns a starting value into an ending value over a set number of years.
CAGR Calculator
An investment that grows from $10,000 to $35,000 in 10 years has a CAGR of about 13.35% a year. That is a total gain of 250%, an absolute gain of $25,000 and a 3.5x money multiple.
How to use this cagr calculator
- Enter the beginning value of the investment.
- Enter the ending value.
- Enter the number of years between them.
- Read the CAGR, total growth, absolute return and money multiple.
The math behind the result
CAGR = (Ending value ÷ Beginning value)1 ÷ years − 1
It is the single steady rate that would grow the starting amount to the ending amount if growth were smooth every year.
Worked example
$10,000 growing to $35,000 over 10 years:
- Ratio: 35,000 ÷ 10,000 = 3.5
- CAGR: 3.50.1 − 1 = 13.35% a year
- Total growth: 250%; absolute gain $25,000; multiple 3.50x
What CAGR tells you
Real returns bounce around from year to year. CAGR smooths them into one number, which makes it easy to compare two investments, two funds or a company’s revenue over different periods.
What CAGR does not tell you
It hides volatility. Two investments can have the same CAGR but very different ups and downs along the way. It also ignores contributions and withdrawals made during the period, so use it for a single lump sum. For regular deposits, use the compound interest calculator.
CAGR vs average return
An investment that gains 50% then loses 50% has an average return of 0% but ends 25% lower. CAGR gives the true compounded result, which is why it is the better measure over several years.
Key terms
- CAGR
- Compound annual growth rate, the steady yearly rate that links a start and end value.
- Money multiple
- Ending value divided by starting value.
- Absolute return
- The plain dollar gain or loss.
Frequently asked questions
How do you calculate CAGR?
Divide the ending value by the beginning value, raise the result to the power of one divided by the number of years, then subtract 1.
What is a good CAGR?
It depends on the asset and risk. Broad stock market indexes have historically returned roughly 7% to 10% a year over long periods before inflation, but no return is guaranteed.
Can CAGR be negative?
Yes. If the ending value is lower than the beginning value, CAGR is negative.
Does CAGR include dividends?
Only if you include them in the ending value. Use a total-return value to include reinvested dividends.
Sources and further reading
Related calculators
Related guides
Figures in the examples are illustrative and use the inputs shown. Market rates and program rules change; confirm current terms with your lender or the linked official sources before making a decision.
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Compound interest is the most powerful force in investing -- starting early and staying consistent consistently outperforms timing the market. Understanding investment return metrics like CAGR, IRR, and Sharpe ratio helps you evaluate opportunities objectively. Use our free calculators to model different scenarios before committing capital.
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Built by Abdul Rahman · Last reviewed: · Report an error
Disclaimer: This calculator provides estimates for educational purposes only and is not financial, tax, or legal advice. Results depend on the figures you enter and on simplified assumptions; actual rates, taxes, and outcomes will differ. Consult a qualified professional before making financial decisions.