CAGR Calculator
- Total return
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- Growth multiple
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- Years to double at this rate
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Checked against: 10,000 growing to 20,000 over 6 years = 12.25% CAGR; 10,000 at 8% for 10 years = 21,589.25 Last reviewed:
Sources and method
An illustration for general information, not financial advice, a quotation or an offer of credit. Figures from a lender or employer will differ.
CAGR (compound annual growth rate) = (End value ÷ Start value)1 ÷ years − 1. Growing from 10,000 to 20,000 in 6 years is a CAGR of 12.25% a year. It is the one steady yearly rate that would produce the same overall growth.
CAGR is the standard way to compare growth over different periods: investment returns, revenue, user numbers, prices or populations. Enter a starting value, an ending value and the time between them, or switch to “Project forward” to see where a value ends up at a steady growth rate.
The formula
CAGR = (End ÷ Start)1 ÷ n − 1, where n is the number of years.
And in reverse, to project a value: End = Start × (1 + CAGR)n.
Worked examples
An investment
A fund was worth 25,000 five years ago and is worth 38,000 today, with nothing added or withdrawn. CAGR = (38,000 ÷ 25,000)1/5 − 1 = 1.520.2 − 1 = 8.73% a year. The total return is 52%, which sounds bigger but covers five years.
Business revenue
Revenue grew from 1.2 million to 2.1 million over 4 years. CAGR = 1.750.25 − 1 = 15.02%. Dividing the 75% total growth by 4 would give 18.75%, overstating the yearly rate.
Projecting forward
10,000 growing at 8% a year for 10 years: 10,000 × 1.0810 = 21,589.25.
CAGR for common growth multiples
| Period | 1.5× growth | 2× growth | 3× growth | 5× growth | 10× growth |
|---|---|---|---|---|---|
| 3 years | 14.47% | 25.99% | 44.22% | 71.00% | 115.44% |
| 5 years | 8.45% | 14.87% | 24.57% | 37.97% | 58.49% |
| 10 years | 4.14% | 7.18% | 11.61% | 17.46% | 25.89% |
| 15 years | 2.74% | 4.73% | 7.60% | 11.33% | 16.59% |
| 20 years | 2.05% | 3.53% | 5.65% | 8.38% | 12.20% |
How long to double?
| Growth rate | Exact years to double | Rule of 72 estimate |
|---|---|---|
| 2% | 35.0 | 36.0 |
| 4% | 17.7 | 18.0 |
| 6% | 11.9 | 12.0 |
| 8% | 9.0 | 9.0 |
| 10% | 7.3 | 7.2 |
| 12% | 6.1 | 6.0 |
| 15% | 5.0 | 4.8 |
| 20% | 3.8 | 3.6 |
The rule of 72 (divide 72 by the rate) is a good mental shortcut between about 4% and 15%.
Why CAGR and average return differ
Yearly returns compound: each year’s gain or loss is applied to the result of the year before. A simple average ignores that, so it always overstates the real growth when returns vary. Over three years with returns of +20%, −10% and +15%, the average is 8.33%, but 1.20 × 0.90 × 1.15 = 1.242, a CAGR of only 7.49%. Our guide on why percentage changes do not cancel out explains the arithmetic.
What CAGR does not tell you
- Volatility. Two investments with the same CAGR can have had very different journeys.
- Cash flows. Regular contributions or withdrawals need a money-weighted return instead.
- The future. A past CAGR is a description, not a forecast.
- Inflation. Subtract inflation (approximately) for a real growth rate.
For savings with regular deposits, the compound interest calculator is the better tool. For a single change between two values, the percentage calculator gives the total percentage change.
This calculator is for illustration and general information, not investment advice.
Frequently asked questions
What is the CAGR formula?
CAGR = (Ending value ÷ Starting value)1 ÷ years − 1. An investment that grows from 10,000 to 20,000 in 6 years has a CAGR of 21/6 − 1 = 12.25% a year.
Why is CAGR not the same as the average annual return?
An average of yearly returns ignores compounding. A gain of 50% followed by a loss of 50% averages 0%, but 100 becomes 150 and then 75, a CAGR of −13.4%. CAGR is the single steady rate that turns the starting value into the ending value.
Can CAGR be negative?
Yes. If the ending value is below the starting value, the CAGR is negative. Going from 10,000 to 8,000 over 3 years is a CAGR of −7.17% a year.
How do I calculate CAGR in Excel or Google Sheets?
Use =(B2/A2)^(1/C2)-1 with the start value in A2, the end value in B2 and the years in C2, then format the cell as a percentage. =RRI(C2,A2,B2) gives the same answer.
Can I use CAGR for part years?
Yes. Enter the period in years as a decimal: 18 months is 1.5 years. Annualising very short periods can exaggerate the rate, though, so treat CAGRs over less than a year with caution.
Does CAGR account for money added or withdrawn?
No. CAGR assumes a single starting amount with nothing added or taken out. If you made regular contributions, the CAGR of the total balance overstates the return on your money. A money-weighted measure such as XIRR handles cash flows.