CAGR Calculator
Calculate the compound annual growth rate (CAGR) for any investment. Enter the beginning value, ending value, and time period to find the annualized rate of return, then compare it against benchmark indices like the S&P 500.
Enter Investment Data
Enter the beginning value, ending value, and time period to calculate the compound annual growth rate.
Compound Annual Growth Rate
20.11%
$10,000 grew to $25,000 over 5 years at a compound rate of 20.11% per year.
Analysis
CAGR
20.11%
Annual compound rate
Total Return
150.0%
$15,000 gained
Doubling Time
3.6 yrs
Rule of 72
Time Period
5 yrs
$10,000 → $25,000
Compare against benchmark CAGR rates
| Benchmark | Historical CAGR | Doubling Time | vs. Your CAGR |
|---|---|---|---|
| S&P 500 (historical) | 10.3% | 7.0 yrs | +9.8% |
| Nasdaq Composite | 12.1% | 6.0 yrs | +8.0% |
| Berkshire Hathaway | 19.8% | 3.6 yrs | +0.3% |
| US Bonds (10Y) | 4.5% | 16.0 yrs | +15.6% |
| Gold | 7.8% | 9.2 yrs | +12.3% |
| US Real Estate | 5.5% | 13.1 yrs | +14.6% |
| Inflation (CPI) | 3.2% | 22.5 yrs | +16.9% |
View year-by-year growth at 20.11% CAGR
| Year | Value | Gain from Start |
|---|---|---|
| Start | $10,000 | - |
| Year 1 | $12,011.24 | +$2,011.24 |
| Year 2 | $14,427 | +$4,427 |
| Year 3 | $17,328.62 | +$7,328.62 |
| Year 4 | $20,813.83 | +$10,813.83 |
| Year 5 | $25,000 | +$15,000 |
Understanding CAGR
CAGR answers a simple question: "If my investment grew smoothly at the same rate every year, what would that rate be?" In reality, investments are volatile: they go up 30% one year and down 10% the next. CAGR smooths out the bumps to give you a single comparable number.
The formula: CAGR = (Ending Value ÷ Beginning Value)1/n − 1, where n is the number of years.
The Power of Compounding
Einstein allegedly called compound interest the "eighth wonder of the world." Whether or not he said it, the math is remarkable:
- At 7% CAGR, your money doubles every ~10 years
- At 10% CAGR, your money doubles every ~7 years
- At 15% CAGR, your money doubles every ~5 years
- At 20% CAGR, your money doubles every ~3.6 years
This is why starting early matters: even small differences in CAGR compound into massive differences over decades.
Want to see actual historical returns? Try our "If You Bought" calculator to see what a past investment in any of 510+ stocks would be worth today, including reinvested dividends.
CAGR Calculator FAQ
What is CAGR?
CAGR stands for Compound Annual Growth Rate. It measures the average annual rate of return an investment would need to grow from its beginning value to its ending value over a specific period, assuming the profits were reinvested at the end of each year. It smooths out volatility and gives you a single 'annualized' return number.
How is CAGR calculated?
The formula is: CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) − 1. For example, if a $10,000 investment grew to $25,000 over 5 years: CAGR = ($25,000 ÷ $10,000)^(1/5) − 1 = 20.1%. This means the investment grew at an equivalent rate of 20.1% per year, compounded.
What is the difference between CAGR and average return?
Average (arithmetic) return simply adds up yearly returns and divides by the number of years. CAGR accounts for compounding. Example: if an investment returns +100% in year 1 and −50% in year 2, the average return is 25% but the CAGR is 0% (you ended where you started: $100 → $200 → $100). CAGR is the more accurate measure of actual investment performance.
What is a good CAGR?
It depends on the asset class and time period. The S&P 500 has historically delivered roughly 10% CAGR (before inflation, about 7% after inflation). A CAGR above 15% over 5+ years is exceptional. Warren Buffett's Berkshire Hathaway has achieved roughly 20% CAGR over 50+ years, making it one of the best long-term records in history.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes for an investment to double. Divide 72 by the CAGR: at 10% CAGR, your money doubles in about 7.2 years. At 20% CAGR, it doubles in 3.6 years. At 6% (typical bond return), it takes 12 years to double.
Can CAGR be used for things other than investments?
Yes. CAGR is used to measure growth of revenue, earnings, users, GDP, or any metric over time. When a company reports '15% revenue CAGR over 5 years,' it means their revenue grew at an annualized compound rate of 15%.