CAGR Calculator
Calculate the compound annual growth rate of your investments, project future values, or determine how long to reach your target.
Calculate CAGR
Compound Annual Growth Rate
Start
$10,000.00
End
$25,000.00
Year-by-Year Growth
| Year | Value | Growth |
|---|---|---|
| 0 | $10,000.00 | - |
| 1 | $12,011.24 | +$2,011.24 |
| 2 | $14,427.00 | +$2,415.75 |
| 3 | $17,328.62 | +$2,901.62 |
| 4 | $20,813.83 | +$3,485.21 |
| 5 | $25,000.00 | +$4,186.17 |
What is CAGR?
CAGR (Compound Annual Growth Rate) is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each period of the investment's life.
CAGR Formula
CAGR = (FV / PV)^(1/n) - 1
- FV = Final Value (ending balance)
- PV = Present Value (beginning balance)
- n = Number of years
Future Value Formula
FV = PV × (1 + CAGR)^n
Use this formula to project how much your investment will be worth at a given growth rate over a specific time period.
Why CAGR Matters
- 1.Smooths out volatility: CAGR provides a single growth rate that "smooths" the irregular growth pattern.
- 2.Easy comparison: Compare investments with different time periods or starting values.
- 3.Realistic expectations: Understand the average annual return your investment achieved.
- 4.Future planning: Project future values based on historical or expected growth rates.
Typical CAGR Benchmarks
| Investment Type | Historical CAGR Range | Notes |
|---|---|---|
| S&P 500 | ~10% | Long-term average (100+ years) |
| Bonds | 4-6% | Lower risk, lower return |
| Real Estate | 8-12% | Including appreciation and income |
| Gold | 1-3% | Hedge against inflation |
| Savings Account | 0.5-2% | Very low risk |
CAGR Limitations
Ignores Volatility
CAGR assumes steady growth, hiding the ups and downs along the way.
Not a Predictor
Past CAGR doesn't guarantee future performance.
Ignores Cash Flows
Doesn't account for additional investments or withdrawals.
Terminal Values Only
Only considers start and end values, not intermediate performance.