Calculator Inputs
$
Initial investment amount or portfolio value at the start of the period.
$
Final value at the end of the period. Enter the current or target value.
yrs
Length of the investment period in years. Decimals are supported (e.g. 2.5).
Results
CAGR
13.35%
Compound Annual Growth Rate
Total Return
250.00%
Total Gain / Loss
$25,000
$10,000 Would Grow To
$35,000
Doubling Time (Rule of 72)
5.4 yrs
At 13.35% CAGR
Starting Value
$10,000
Investment Growth Over Time (at 13.35% CAGR)
Growth Scenarios — Same Starting Value, Different CAGR
How $10,000 grows over 10 years at different annual return rates.
| Annual Return (CAGR) | Value After 10 Yrs | Total Gain | Multiple |
|---|---|---|---|
| 3.00% | $13,439 | $3,439 | 1.34× |
| 5.00% | $16,289 | $6,289 | 1.63× |
| 7.00% | $19,672 | $9,672 | 1.97× |
| 10.00% | $25,937 | $15,937 | 2.59× |
| 12.00% | $31,058 | $21,058 | 3.11× |
| 13.30% ◀ your result | $34,858 | $24,858 | 3.49× |
| 15.00% | $40,456 | $30,456 | 4.05× |
| 20.00% | $61,917 | $51,917 | 6.19× |
Year-by-Year Growth
| Year | Value | Gain from Start | Return from Start |
|---|---|---|---|
| Start | $10,000 | $0.00 | 0.00% |
| 1 | $11,335 | $1,335 | 13.35% |
| 2 | $12,847 | $2,847 | 28.47% |
| 3 | $14,562 | $4,562 | 45.62% |
| 4 | $16,505 | $6,505 | 65.05% |
| 5 | $18,708 | $8,708 | 87.08% |
| 6 | $21,205 | $11,205 | 112.05% |
| 7 | $24,035 | $14,035 | 140.35% |
| 8 | $27,243 | $17,243 | 172.43% |
| 9 | $30,879 | $20,879 | 208.79% |
| 10 | $35,000 | $25,000 | 250.00% |
What is CAGR?
CAGR is the rate at which an investment grows from its starting value to its ending value, assuming profits were reinvested each year. It "smooths out" year-to-year volatility to give you a single meaningful annual rate. Formula: CAGR = (End / Start)^(1/Years) − 1.
CAGR vs Average Return
CAGR (geometric mean) is always ≤ the arithmetic average return. If a stock rises 100% then falls 50%, the average is 25%/yr but the CAGR is 0% — you're back where you started. CAGR reflects actual compounded wealth growth, making it the correct metric for measuring investment performance.
The Rule of 72
Divide 72 by the CAGR to estimate how many years it takes for an investment to double. At 7% CAGR: 72 ÷ 7 ≈ 10.3 years. At 12% CAGR: 72 ÷ 12 = 6 years. This is a quick mental math shortcut, accurate within 1–2 years for rates between 4% and 20%.
Benchmarks
S&P 500 long-run CAGR is ~10–11% (nominal), ~7–8% inflation-adjusted. Warren Buffett's Berkshire Hathaway has compounded at ~20% CAGR over 58 years — considered extraordinary. Most actively managed funds underperform 10% CAGR over 20-year periods, which is one reason many investors model their own long-term projections with a compound interest calculator before picking a target return.
Frequently Asked Questions
What is CAGR?
CAGR (Compound Annual Growth Rate) is the rate at which an investment grows from its starting value to its ending value, assuming profits are reinvested each year. It smooths out year-to-year volatility into a single meaningful annual rate. Formula: CAGR = (End Value / Start Value)^(1/Years) − 1.
How is CAGR different from average return?
CAGR (geometric mean) is always equal to or less than the arithmetic average return. If a stock rises 100% then falls 50%, the average return is 25%/yr but the CAGR is 0% — you broke even. CAGR reflects actual compounded wealth growth, making it the correct metric for measuring investment performance.
What is the Rule of 72?
Divide 72 by the CAGR to estimate how many years it takes to double your money. At 7% CAGR: 72 ÷ 7 ≈ 10.3 years. At 12% CAGR: 72 ÷ 12 = 6 years. This mental-math shortcut is accurate within 1–2 years for rates between 4% and 20%.
What is a good CAGR for an investment?
The S&P 500's long-run CAGR is roughly 10–11% nominal and 7–8% after inflation. A CAGR above 15% over many years is exceptional. Most actively managed funds underperform 10% CAGR over 20-year periods, which is why low-cost index funds are recommended for most investors.
Can CAGR be negative?
Yes. If the ending value is lower than the starting value, CAGR is negative, meaning the investment lost value on an annualized basis. A negative CAGR still smooths the decline into a single yearly rate — for example, an investment that fell from $10,000 to $8,000 over 5 years has a CAGR of about -4.4% per year.
How do I calculate CAGR for a stock with dividends?
To capture the full return, use total return values (price appreciation plus reinvested dividends) as your start and end values rather than price alone. Using price-only values understates CAGR for dividend-paying stocks, since it ignores the compounding effect of reinvested dividend income over the holding period.
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