CAGR Calculator
Educational only, not financial advice.
CAGR (compound annual growth rate) answers one question: “If my investment had grown at a steady rate each year, what rate would get me from my starting value to my ending value over this time period?”
Enter Your Numbers
CAGR smooths out the ups and downs into a single annualized rate. It does not show volatility, only the overall path from start to finish.
Note: This calculator assumes no additional contributions or withdrawals between the start and end.
Results
Enter your numbers above and click “Calculate CAGR”.
To learn more, see What Is a Good Rate of Return? and Risk vs Return.
How CAGR is calculated
The formula is short:
CAGR = (ending value ÷ starting value)1 ÷ years − 1
Using this calculator's default numbers: $10,000 growing to $24,000 over 10 years. The ending value is 2.4 times the start. Take the 10th root of 2.4, which is about 1.0915, and subtract 1. The CAGR is about 9.15% per year.
That does not mean the investment rose 9.15% every year. It might have gained 30% one year and lost 10% the next. CAGR is the single steady rate that would have produced the same start and end values.
Worked examples
| Start | End | Years | CAGR |
|---|---|---|---|
| $10,000 | $15,000 | 5 | 8.45% |
| $10,000 | $20,000 | 10 | 7.18% |
| $5,000 | $8,000 | 7 | 6.94% |
| $10,000 | $9,000 | 3 | −3.45% |
These are arithmetic examples, not forecasts or typical market returns.
CAGR vs average annual return
A simple average of yearly returns can make results look better than they were. Suppose an investment gains 50% in year one and loses 50% in year two. The average of +50% and −50% is 0%, which sounds like breaking even. In dollars, $10,000 becomes $15,000 and then $7,500. You lost a quarter of your money.
CAGR gets this right. $7,500 ÷ $10,000 = 0.75, the square root of 0.75 is about 0.866, so the CAGR is about −13.4% per year. When returns jump around, the average and the CAGR drift apart, and CAGR is the one that matches your actual balance.
What CAGR does not tell you
- Volatility: two investments with the same CAGR can have had very different rides. One might have dropped 40% along the way.
- Contributions and withdrawals: this calculator assumes one deposit at the start and nothing added or taken out. If you added money over time, CAGR on your account balance will overstate or understate how the investment itself did.
- Your own result: Morningstar's Mind the Gap research measures the gap between what funds returned and what the average dollar invested in them earned, because buying and selling at the wrong times changes investor results.
- Inflation: CAGR is nominal unless you enter inflation-adjusted values. A 5% CAGR during 3% inflation is roughly a 2% real gain.
- The future: a past CAGR is a description of history. It is not a forecast.
Using CAGR with fees
If the start and end values you enter come from a fund's price history, the fund's fees are already taken out. If you are working from an index's return, remember that a fund tracking it charges a fee each year. As a rough check, an index CAGR of 7% and a 0.25% MER suggest a fund CAGR a little under 6.75%, before trading costs and taxes. The fee impact calculator shows how that gap compounds.
Rule of 72
A quick way to sense-check a growth rate: divide 72 by the annual rate to estimate how many years it takes to double. At 6% a year, 72 ÷ 6 = 12 years. Checking with the formula, 1.06 to the power of 12 is about 2.01, so the shortcut is close. It is an approximation and gets less accurate at very high rates.
Tips for good inputs
- Use total-return values that include reinvested dividends where you can. Price-only numbers understate dividend-paying investments.
- Enter partial years as decimals. Two and a half years is 2.5.
- Compare CAGRs only over the same period. A fund's 10-year CAGR and another fund's 5-year CAGR are not comparable.
- To project forward from a rate instead of measuring the past, use the compound interest calculator, or the SEC's compound interest calculator on Investor.gov.
Example: checking a TFSA's growth
Say you put $6,000 into a TFSA at the start of a year, added nothing, and five years later the account shows $7,800. Enter 6000, 7800 and 5. The calculator returns about 5.39% per year. That is the steady rate that would turn $6,000 into $7,800 over five years.
Now say you also added $1,000 each year. The ending balance would be higher, but much of that growth is your own deposits, not investment gains. Running CAGR on the balance would make the investment look better than it was. For accounts with regular deposits, a money-weighted return from your broker's statement is the better measure.
Where to find start and end values
- Your own account: use statement values from the same date in different years, and only when there were no deposits or withdrawals in between.
- A fund: the fund company's fact sheet usually lists annualized returns for 1, 3, 5 and 10 years. Those annualized figures are already CAGRs.
- A company: CAGR works on revenue, earnings or dividends too, not just prices. Take the figures from the company's annual reports.
Quick answers
Is a higher CAGR always better?
Not on its own. Compare it with the risk taken and the time period. A higher CAGR from a much more volatile investment over a short window can be luck rather than skill.
Can CAGR be negative?
Yes. If the ending value is below the starting value, the CAGR is negative, as in the $10,000 to $9,000 example above.
Related glossary terms
Sources
- Investor.gov (SEC): Compound Interest Calculator
- FINRA: Understanding Bond Yield and Return
- Morningstar: Investors Still Need to Mind the Gap in Their Funds' Returns
Reviewed by Greg Parsons. Links checked October 14, 2026. Educational only, not financial advice.