CAGR Calculator
Investing & ReturnsFind the compound annual growth rate.
Compound annual growth rate: 9.60%
Your investment
Advanced: fees, tax, inflation & benchmark
- Beginning value$10,000
- Growth$15,000
Returns in detail
Investment growth curve
Value gained each year
Because each year builds on a larger base, the dollars added grow over time even though the rate stays the same — the essence of compounding.
Gain added that year
CAGR vs simple average return
The simple average just splits your total return evenly across the years; CAGR accounts for compounding, so for a gain it is always the lower, honest figure. The gap widens the longer you hold.
- CAGR9.60%
- Simple average15.00%
Nominal vs real & net CAGR
How inflation, fees and tax peel your headline rate back to the return you actually keep. With those advanced inputs left at zero, every bar matches the nominal rate.
- Nominal CAGR9.60%
- Real (after inflation)9.60%
- After fees9.60%
- After tax9.60%
- Net (all-in)9.60%
Benchmark comparison
What your beginning value would have grown to at the benchmark rate, set against where your investment actually ended.
- Your investment$25,000
- Benchmark (7.0%)$19,672
You beat the benchmark by $5,328 — about 2.60% a year.
Sensitivity to the holding period
The same total gain implies a very different annual rate depending on how long it took — which is why a CAGR is meaningless without its time span. A longer horizon always lowers the implied rate.
Implied CAGR (%)
From beginning to ending value, step by step
How your starting amount compounds into the ending value, and what an annual fee and a tax on the gain would take off the top.
- Beginning value+ $10,000
- Compound growth at 9.60%+ $15,000
- Ending value$25,000
Year-by-year growth projection
| Year | Value (CAGR) | Straight-line | Annual gain |
|---|---|---|---|
| 0 | $10,000 | $10,000 | — |
| 1 | $10,960 | $11,500 | $960 |
| 2 | $12,011 | $13,000 | $1,052 |
| 3 | $13,164 | $14,500 | $1,153 |
| 4 | $14,427 | $16,000 | $1,263 |
| 5 | $15,811 | $17,500 | $1,384 |
| 6 | $17,329 | $19,000 | $1,517 |
| 7 | $18,991 | $20,500 | $1,663 |
| 8 | $20,814 | $22,000 | $1,822 |
| 9 | $22,811 | $23,500 | $1,997 |
| 10 | $25,000 | $25,000 | $2,189 |
The compound column follows the exact CAGR; the straight-line column splits the total gain evenly. Both meet at your ending value.
Nominal vs real return
| Nominal CAGR | 9.60% |
|---|---|
| Real CAGR (after inflation) | 9.60% |
| Inflation drag | 0.00% |
| Nominal ending value | $25,000 |
| Ending value in today's money | $25,000 |
Real figures use the Fisher relation, dividing by the inflation factor rather than subtracting it.
Fees & taxes impact
| Ending value (gross) | $25,000 |
|---|---|
| Annual fee drag | $0 |
| Value after fees | $25,000 |
| Tax on the gain | $0 |
| Net ending value | $25,000 |
| Net CAGR | 9.60% |
The fee is modeled as an annual drag; the tax is a single charge on the gain at the end. Both are hypotheticals layered on your result.
CAGR vs simple return
| CAGR (compound) | 9.60% |
|---|---|
| Simple average return | 15.00% |
| Total return | 150.0% |
| Growth multiple | 2.50× |
| Overstatement of the simple average | 5.40% |
Sensitivity to the ending value
How the CAGR moves if the ending value lands above or below your estimate.
| If the ending value is | Ending value | CAGR | Total return |
|---|---|---|---|
| −20% | $20,000 | 7.18% | 100.0% |
| −10% | $22,500 | 8.45% | 125.0% |
| Your estimate | $25,000 | 9.60% | 150.0% |
| +10% | $27,500 | 10.65% | 175.0% |
| +20% | $30,000 | 11.61% | 200.0% |
Inputs & outputs at a glance
Inputs
| Beginning value | $10,000 |
|---|---|
| Ending value | $25,000 |
| Years | 10 yrs |
| Benchmark | 7.0% |
Outputs
| CAGR | 9.60% |
|---|---|
| Total return | 150.0% |
| Growth multiple | 2.50× |
| Absolute gain | $15,000 |
| Real CAGR | 9.60% |
| Net CAGR | 9.60% |
| Doubling time | 7.6 yrs |
The CAGR formula
CAGR comes from one clean equation linking your two values and the time between them. Rearranged, the same equation solves for whichever quantity you leave out:
CAGR = (Ending ÷ Beginning)^(1 ÷ years) − 1Ending = Beginning × (1 + CAGR)^yearsBeginning = Ending ÷ (1 + CAGR)^yearsYears = ln(Ending ÷ Beginning) ÷ ln(1 + CAGR)Real CAGR = (1 + CAGR) ÷ (1 + inflation) − 1Total return is simply Ending ÷ Beginning − 1; the simple average is that total divided by the number of years.
The fee-adjusted rate multiplies the yearly growth factor by (1 − fee); the after-tax rate taxes only the gain, once, at the end.
CAGR smooths over every up and down in between — it is the single constant rate that would have produced the same final result.
Worked example
Suppose 10,000 grows to 25,000 over 10 years. Divide 25,000 by 10,000 to get a growth multiple of 2.5 — a 150% total return. Raise 2.5 to the power of 1/10 (about 0.1) and subtract 1: that is a CAGR of roughly 9.6% a year. Notice how different that is from the 15% you'd get by naively splitting 150% across 10 years — compounding is exactly why the honest annual figure is lower.
With your numbers
$10,000 growing to $25,000 over 10 yrs is a CAGR of 9.60% — a 2.50× growth multiple and a 150.0% total return.
Input definitions
- Beginning value
- What the investment was worth at the start of the period — the base the growth is measured from.
- Ending value
- What it is worth at the end. Divided by the beginning value, it gives the total growth and multiple.
- Number of years
- The length of the period. Fractional years are fine — enter 18 months as 1.5.
- Growth rate (CAGR)
- The compound annual rate. An input when you solve for a value or a duration; the answer otherwise.
- Annual fee
- A yearly expense ratio or platform fee, modeled as a drag on the compound growth factor.
- Tax on the gain
- A single hypothetical tax applied to the profit at the end, to show the after-tax annual rate.
- Inflation rate
- Yearly price increases, used to convert nominal figures into real, today's-money terms via the Fisher relation.
- Benchmark rate
- A reference annual return your beginning value is grown against, to test whether you beat or trailed it.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Scenario model, not a forecast. Returns, volatility, inflation, fees, and taxes are assumptions and actual investment outcomes can be lower or negative.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Choose what you want to find — the CAGR itself, a projected ending value, the starting value you'd need, or how long a target takes — then enter the three quantities that mode asks for (for the rate, that's your beginning value, ending value and number of years).
- 02
Open Advanced to layer on a hypothetical annual fee, a tax on the gain, an inflation rate for today's-money figures, and a benchmark return to measure against. Fractional years are fine — enter 18 months as 1.5.
- 03
Read your CAGR alongside the total return, growth multiple and doubling time, then explore the growth curve, the CAGR-vs-simple-average and benchmark charts, the year-by-year table, and save scenarios to compare different rates, horizons or outcomes side by side.
Formula
CAGR = (ending value ÷ beginning value)^(1 ÷ years) − 1. Equivalently, ending value = beginning value × (1 + CAGR)^years. The calculator can rearrange this same relationship to solve for the beginning value, ending value or duration.
Example
An investment grows from 10,000 to 20,000 over 8 years. CAGR = (20,000 ÷ 10,000)^(1 ÷ 8) − 1 = about 9.05% per year. This does not mean the investment earned exactly 9.05% in every individual year.
Definitions
- Beginning value
- The value at the start of the measurement period.
- Ending value
- The value at the end of the measurement period.
- CAGR
- The constant annual compound rate that links the beginning and ending values.
- Total return
- The full-period percentage change, (ending value ÷ beginning value) − 1.
- Growth multiple
- Ending value divided by beginning value; 2× means the value doubled.
Good to know
What CAGR really measures
The compound annual growth rate answers a deceptively simple question: if your investment had grown by the exact same percentage every single year, what would that percentage have to be to get from where it started to where it ended? Real investments never behave so politely — they lurch up one year, slump the next, drift sideways for a while — but CAGR ignores all of that turbulence and reports the one smooth, constant rate that produces the same final result. That is its power and its purpose. By collapsing a messy, uneven journey into a single yearly figure, it lets you compare a stock you held for three years against a fund you held for eleven, or a house against a bond, on genuinely equal footing. Take this calculator's default: 10,000 that grows into 25,000 over ten years. The honest annualized rate is about 9.6% a year — the rate that, compounded ten times over, turns the first figure into the second. Notice the word compounded. CAGR is not an average in the everyday sense; it is a geometric rate, built so that each year's growth is applied to the result of all the years before it. That compounding is precisely why a single steady-looking number can describe an investment that, in reality, may have doubled, halved, and recovered along the way. Whenever you see a growth rate quoted for an investment held over several years, it is almost always a CAGR, and understanding what it does — and quietly hides — is the difference between reading a return correctly and being misled by it.
How this calculator solves the equation four ways
Underneath every figure on this page sits one compact equation: the ending value equals the beginning value multiplied by one plus the CAGR, raised to the power of the number of years. Four quantities, bound together — which means if you know any three of them, the fourth is fully determined. This calculator is built around that fact. In its default mode it does the classic job: you supply the beginning value, the ending value and the span of years, and it divides the two values, takes the appropriate root, and hands back the rate. But flip the mode and the same equation runs in reverse. Give it a rate and a horizon and it projects the ending value you would reach. Give it a target ending value and a rate and it tells you the starting amount required to land there. Give it both values and a rate and it solves for the time the journey takes, using logarithms rather than roots. This four-way flexibility turns a backward-looking measurement tool into a forward-looking planning one. A result you derive in one mode will reproduce exactly if you feed it back through another, because there is only ever one equation being rearranged. The calculator also guards the edges: a beginning value of zero, a duration of zero, or a target that simply cannot be reached at the rate you chose — trying to grow toward a higher number at a negative rate, say — are caught and explained rather than dressed up as a meaningless answer. That discipline matters, because a confidently wrong number is worse than an honest blank.
CAGR, total return, and the simple-average trap
Three numbers describe the same gain, and confusing them is the most common error in reading returns. Total return is the cumulative result: turning 10,000 into 25,000 is a 150% total return and a growth multiple of 2.5 times, with no reference to how long it took. It is a fine headline but a poor basis for comparison, because a 150% gain over ten years is worlds apart from the same 150% over two. The tempting fix is to divide that total by the number of years — 150% over ten years becomes a 15% simple average. This figure feels intuitive and is almost always wrong. It quietly assumes each year's growth is calculated on the original amount, never on the accumulated balance, which is not how investments work. The true compound rate here is about 9.6%, not 15% — the simple average overstates the real annual pace by more than five percentage points. That gap is not a rounding quirk; it is the mathematical signature of compounding, and it grows wider the longer the period and the higher the return. The calculator lays all three out together precisely so the contrast is impossible to miss: lean on the total return for the sheer size of the gain, on the CAGR for its honest yearly pace, and treat the simple average as the overstatement it plainly is. Whenever a marketing figure splits a multi-year gain evenly across the years, treat it with suspicion — the compound rate underneath will be lower, and the calculator's CAGR-versus-simple chart shows you by exactly how much.
When CAGR is the right tool — and when it isn't
CAGR earns its keep in one specific situation: a single lump sum, invested once and left alone, measured between two points in time. For that case it is the cleanest summary of performance there is, and it shines brightest when you need to compare investments of different lengths or against a benchmark. Ranking a property held seven years against a portfolio held fifteen is impossible with raw gains but trivial with two CAGRs. The trouble starts the moment money moves in or out along the way. Because CAGR looks only at the first value, the last value, and the time between, it is blind to contributions and withdrawals. If you drip-fed savings into an account over a decade and then computed a CAGR from the opening balance to the closing one, the result would be wildly flattering — much of that final figure is simply money you added, not growth the investment produced. For anything with ongoing cash flows — a pension you contribute to monthly, a rental that throws off income, a portfolio you top up each year — you need a money-weighted measure such as the internal rate of return, or its dated cousin XIRR, which account for the timing and size of every flow. The honest rule of thumb: if nothing went in or came out between your two dates, CAGR is exactly right; if anything did, reach for a cash-flow-aware tool instead. Using CAGR on a contribution-fed account is the single most frequent way investors accidentally overstate how well they have done.
Stripping out inflation: the real CAGR
A return is only as good as what it can buy, and a headline rate flatters itself by ignoring that money loses purchasing power every year. The real CAGR fixes this by deflating your nominal rate, and the calculator does it the correct way rather than the lazy one. The lazy method simply subtracts inflation from the return — a 9.6% nominal rate minus 3% inflation equals 6.6%. That is close, but slightly too generous, because growth and inflation both compound and the relationship between them is multiplicative, not additive. The proper approach, named after the economist Irving Fisher, divides one plus the nominal rate by one plus the inflation rate before subtracting one. On the default case at 3% inflation, that yields a real CAGR of about 6.4% — a touch below the naive 6.6%, and the difference widens as both figures grow. The real rate is the one that actually matters for long-horizon goals like retirement, because it tells you how much your wealth grew in goods and experiences rather than in nominal currency units. An investment can post a proud-looking nominal return and still leave you barely ahead, or even behind, once inflation has taken its cut. The calculator surfaces the real CAGR and the ending value in today's money side by side with their nominal twins, so you can see at a glance how much of your apparent gain is genuine growth and how much is merely the shrinking yardstick of the currency catching up with you.
From gross to net: fees and taxes
The rate you earn and the rate you keep are rarely the same, and two forces drive the wedge between them. The first is fees. An annual expense ratio or platform charge skims a small percentage of your balance every year, and because it is taken from the compounding base, its damage compounds too — a fee that looks trivial as a single year's figure becomes a meaningful drag over a decade. The calculator models it as a yearly haircut on the growth factor, so a half-percent fee on the default investment quietly lowers the rate and shaves the ending value. The second force is tax. Here the tool levies one charge on the profit at the close, mirroring how a capital-gains bill falls due only once you actually sell, rather than nibbling away each year. Stack the two together — a 0.5% annual fee and a 15% tax on the profit — and the default investment's net rate falls from about 9.6% to roughly 8.1%, with the ending value dropping from 25,000 to around 21,700. That is the figure that actually lands in your pocket, and it is the one worth planning around. Both adjustments are hypotheticals layered on top of the result you entered, not changes to the underlying growth, which keeps the headline CAGR honest while letting you explore what costs and taxes would do to it. The lesson is the familiar one made concrete: hold costs down, shelter gains from tax where you legitimately can, and judge an investment by its net rate, because the gross one is a number you never get to spend.
Benchmarks and the doubling rule
A return means little in isolation; it only becomes useful when measured against an alternative. That is what the benchmark does. Set a reference rate — the long-run return of a broad market index, the yield on a safe bond, whatever opportunity you are weighing your investment against — and the tool compounds your starting amount at that steady rate across the same span of years, then lays the result beside where your investment actually ended. On the default case with a 7% benchmark, the 10,000 would have reached about 19,700, so ending at 25,000 means you beat the reference by roughly 5,300, or about 2.6 percentage points a year. Had your investment trailed, the calculator would show the shortfall just as plainly. This framing keeps you honest: a 9.6% return is excellent against cash and unremarkable against a roaring bull market, and only the comparison tells you which. Alongside the benchmark sits a second intuition pump — the doubling time. At a 9.6% CAGR your money doubles about every 7.6 years, a figure the calculator computes exactly from logarithms. You may know the popular shortcut, the rule of 72, which estimates doubling time by dividing 72 by the percentage rate; here that gives 7.5 years, impressively close to the exact 7.6. The rule of 72 is a fine mental approximation for rates in the single digits, but the calculator reports the precise figure, which drifts away from the shortcut at higher rates. Together, the benchmark and the doubling time turn an abstract percentage into something you can feel: is it beating the alternative, and how long until it grows my money twofold?
Reading the charts and the time-span trap
The visuals on this page are built to make the behavior of compound growth tangible rather than abstract. The growth curve plots the compound path against a straight line drawn between your starting and ending points, and the gap between them is the whole story of compounding: the straight line is what the simple-average mindset imagines, while the gently bowed compound curve is what actually happens, sitting below the line for most of the journey before both meet at the end. The year-by-year chart of value gained shows the same truth from another angle — even at a perfectly steady rate, the dollar amount added each year grows, because each year compounds on a larger base than the last. The most quietly important visual, though, is the sensitivity chart, which holds your starting and ending values fixed and recomputes the implied rate across a range of holding periods. It drives home a point that trips up even experienced investors: the very same total gain corresponds to a completely different annual rate depending on how long it took. Doubling your money is a 14.9% CAGR over five years but only a 3.5% CAGR over twenty. This is why a CAGR quoted without its time span is meaningless, and why a headline boasting that a fund 'grew 300%' tells you almost nothing until you know whether that took three years or thirty. The sensitivity table extends the idea to the ending value, showing how the rate swings if your final figure lands above or below your estimate — a useful reality check when the ending value is itself a projection rather than a settled fact.
Limitations, mistakes, and using the result well
For all its usefulness, CAGR is a summary, and summaries leave things out. Its single greatest blind spot is volatility: two investments can share an identical CAGR while one delivered a smooth ride and the other a stomach-churning sequence of crashes and rebounds, and CAGR cannot tell them apart. Yet the path matters enormously — to the investor's nerve, to the risk of being forced to sell at the bottom, and to anyone drawing income along the way. The most damaging mistakes all stem from forgetting what the number assumes. People apply CAGR to accounts they fed with contributions and congratulate themselves on growth that was mostly their own deposits. They quote a rate without its time span, making a modest long-run return sound spectacular or a brief lucky streak sound durable. They treat a strong historical CAGR as a forecast, when it is strictly a description of the past that smooths over every shock and carries no promise of repeating. And they compare a nominal rate from one era against a real or after-tax rate from another, mixing yardsticks that should never be mixed. Use this calculator to avoid every one of those traps: measure only clean, contribution-free windows; always pair a CAGR with its horizon; read the real and net figures, not just the gross; and lean on the benchmark and sensitivity views to put any single number in context. Treated that way, CAGR is one of the most clarifying figures in finance — a fair, comparable, honest rate. Treated carelessly, it is one of the easiest to be fooled by. The difference is entirely in how well you understand what it is, and is not, telling you.
Frequently asked questions
What is CAGR and how does this calculator work it out?
The compound annual growth rate, or CAGR, is the constant yearly rate that, applied over and over, would carry your starting amount up to your final amount, as if the investment climbed by the same percentage annually. The calculator takes the ratio of ending to beginning, applies the years-th root, and subtracts one. For the default case — 10,000 growing to 25,000 over 10 years — that works out to about 9.6% a year. It is the fairest single figure for weighing investments of different durations, because it puts them all on a per-year footing.
My total return looks huge but the CAGR seems small — why the gap?
Total return is the whole gain over the entire period; CAGR is that gain spread across the years and compounded. Turning 10,000 into 25,000 is a 150% total return, but over 10 years that's only about 9.6% a year, because each year compounds on the prior year's larger balance. A common mistake is to divide the total return by the years — that 'simple average' gives 15% here, which overstates the truth by more than five percentage points. The longer the period, the wider that gap, which is exactly why CAGR, not the average, is the honest figure.
Can I solve for the ending value, starting value or time instead of the rate?
Yes. The CAGR equation links four quantities — beginning value, ending value, years and rate — so fixing any three solves the fourth. Switch the mode to project an ending value from a rate and horizon, to find the starting amount you'd need to hit a target, or to work out how many years a given rate takes to reach a goal. It's the same formula rearranged, so a result you solve in one mode reproduces exactly if you plug it back into another.
How do the fee, tax and inflation adjustments change the result?
They're hypotheticals layered on your headline result, so you can see the return you'd actually keep. Inflation converts the nominal rate to a real one using the Fisher relation (dividing by the inflation factor, not subtracting): at 3% inflation, a 9.6% CAGR becomes about 6.4% real. An annual fee is modeled as a yearly drag on the growth factor, and the tax is a single charge on the gain at the end. On the default case, a 0.5% fee plus a 15% tax on the gain trims the net result to roughly 8.1% a year and the ending value to about 21,700.
What does the benchmark comparison tell me?
Set a benchmark rate and the tool grows your opening figure at that benchmark rate across the same horizon, then sets it against where your investment actually ended. With the default 7% benchmark, your 10,000 would have grown to about 19,700 — so ending at 25,000 means you beat it by roughly 5,300, or about 2.6 percentage points a year. If your investment ends lower, it shows how far you fell short. It's the simplest way to judge a return against the alternative you passed up.
What are the limits of a CAGR figure?
CAGR assumes a single lump sum left untouched — it ignores any money you added or withdrew along the way, so if you made contributions, it will overstate your true per-dollar return. For investments with ongoing cash flows, use a money-weighted measure like IRR or XIRR instead. CAGR is also purely backward-looking: it describes what happened between your two endpoints and smooths over every crash and rally in between. A strong historical CAGR is a description, never a forecast — real returns arrive unevenly, and past performance carries no guarantee of repeating.