CAGR Calculator — Compound Annual Growth Rate
Calculate the compound annual growth rate of any investment, or find out what your investment will be worth given a target CAGR and time horizon.
CAGR Formula Explained
CAGR = (Ending Value / Beginning Value)1/n − 1
Where n is the number of years. CAGR smooths out year-to-year volatility to give a single representative annual growth rate. Unlike a simple average, it accounts for compounding — each year's gain builds on the prior year's balance.
Worked Example
An investment grows from $10,000 to $25,000 over 10 years:
- CAGR = (25,000 / 10,000)^(1/10) − 1
- = 2.5^0.1 − 1
- = 1.0965 − 1
- = 9.65% per year
Rule of 72 check: 72 / 9.65 ≈ 7.5 years to double. Starting at $10,000: doubles to $20,000 at year 7.5, reaches $25,000 at year 10 — consistent.
Historical CAGR Benchmarks
| Asset | 10-yr CAGR | 20-yr CAGR | Notes |
|---|---|---|---|
| S&P 500 | 13.1% | 9.8% | US large-cap stocks |
| Nasdaq 100 | 18.0% | 12.9% | Tech-heavy index |
| US Real Estate (Case-Shiller) | 5.5% | 4.2% | Nominal home prices |
| Gold | 8.0% | 6.0% | Spot gold (USD) |
| 10-yr US Treasury | 2.1% | 2.8% | Long-term bonds |
| Global Stocks (MSCI World) | 11.5% | 8.2% | Diversified international |
| US Small Cap (Russell 2000) | 8.5% | 7.5% | Small-cap domestic |
| Inflation (US CPI) | 3.2% | 2.8% | Purchasing power loss |
| Bitcoin | 90%+ | N/A | Highly volatile |
| Savings Account (HYSA) | ~5% | ~2.5% | Varies with Fed rates |
Approximate figures based on long-run historical data. Past performance does not guarantee future results.
How to Calculate CAGR — Step by Step
CAGR (Compound Annual Growth Rate) smooths out volatility to show the steady-state annual rate that would produce the same result.
- 1Divide ending value by beginning value. Example: $15,000 ÷ $10,000 = 1.5 (the total return multiplier).
- 2Raise to the power of (1 ÷ years). Over 4 years: 1.5^(1/4) = 1.5^0.25 = 1.1067.
- 3Subtract 1 and convert to percentage. 1.1067 − 1 = 0.1067 = 10.67% CAGR. This is the annual rate that turns $10,000 into $15,000 in 4 years.
- 4Verify: $10,000 × 1.1067⁴ = $10,000 × 1.5 = $15,000 ✓
CAGR Examples — Common Investments
| Investment | Start | End | Years | CAGR |
|---|---|---|---|---|
| S&P 500 (2014–2024) | $10,000 | $33,000 | 10 | 12.7% |
| Real estate (avg US) | $250,000 | $420,000 | 10 | 5.3% |
| Bitcoin (2019–2024) | $3,500 | $65,000 | 5 | 79.7% |
| High-yield savings | $10,000 | $14,000 | 8 | 4.3% |
| Startup investment 10× | $50,000 | $500,000 | 7 | 38.9% |
Required CAGR to Reach a Goal — $10,000 Start
| Goal | 5 Years | 10 Years | 20 Years |
|---|---|---|---|
| Double ($20K) | 14.9% | 7.2% | 3.5% |
| Triple ($30K) | 24.6% | 11.6% | 5.6% |
| 10× ($100K) | 58.5% | 25.9% | 12.2% |
| $1 million (100×) | 215% | 58.5% | 25.9% |
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This calculator is for educational purposes only and does not constitute financial advice.