CAGR Calculator

How to use this calculator

The calculator has 4 modes, controlled by the Solve for tabs at the top. Pick the tab for the variable you want to find.

CAGR mode — you know the starting value, ending value, and duration. The calculator tells you the compound annual growth rate. This is the most common use: measuring what an investment actually returned.

Final Value mode — you know the starting value, a CAGR, and how many years. The calculator tells you what the investment would be worth. Use this when projecting forward from a known or assumed rate.

Initial Value mode — you know the target ending value, the rate, and the duration. The calculator works backwards to tell you what you’d need to invest today. Useful for goal-based planning: “I want $500,000 in 15 years at 8% CAGR. What do I need to start with?”

Years mode — you know the starting and ending values and the rate. The calculator tells you how long it takes. Good for checking whether a portfolio can hit a target within a specific timeframe.

Now for each input field:

Initial Value is the starting amount. For a stock portfolio, use what you invested or what it was worth at the beginning of the period you’re measuring. For a fund, use the NAV per unit on the start date times units held.

Final Value is what the investment is worth now (or at the end of the measurement period). Include dividends if they were reinvested. Exclude them if you spent them.

Duration is the number of years (or months) between the two values. For stocks, count from the purchase date to today. Decimals work: 3.5 years is fine.

Inflation Rate is optional. Enter it to see your inflation-adjusted CAGR alongside the nominal figure. Use your country’s average CPI: roughly 2-3% for the US and EU, 4-6% for India in recent years.

Currency changes the symbol on displayed values. It doesn’t affect any calculation.

What CAGR actually measures (and what it doesn’t)

CAGR is a measurement tool, not a prediction. It tells you the constant annual rate that would have taken an investment from its starting value to its ending value over a specific period, if it had grown at that exact rate every single year.

Real investments don’t grow at a constant rate. A portfolio that was up 40% in year one, down 18% in year two, and up 15% in year three didn’t grow at 11.3% per year. But its CAGR is 11.3%, because that’s the rate that, applied consistently for 3 years, produces the same ending value.

That smoothing is the point. CAGR lets you compare a volatile fund to a stable one on the same basis. It strips out the noise and asks: what was the equivalent constant return?

CAGR doesn't describe what happened year by year. It describes the average annual rate you would have needed to get from A to B. That's exactly what makes it useful for comparison, and exactly what makes it misleading if you treat it as a year-by-year prediction.

The formula

One equation drives every mode in this calculator.

Rearranged for the other three solve-for modes:

And for inflation-adjusted CAGR:

The exponent (1/Years) is what makes CAGR compound. It’s the nth root of the total return ratio, where n is the number of years. A $10,000 investment that grows to $40,000 over 10 years has a total return of 300%. Its CAGR is (4.0)^0.1 − 1 = 14.9%. Not 30% (which would be the simple average of 300% over 10 years).

CAGR vs appreciation: two different questions

People sometimes conflate this with an appreciation calculator. They answer different questions.

The appreciation calculator starts with a rate you assume and projects a future value. You’re asking: “If my asset grows at 5% a year, what will it be worth?” That’s a forward projection, typically used for property, savings, or planning for a retirement target.

CAGR starts with two known values (what you had, what you ended up with) and measures what the rate was. You’re asking: “What annual rate explains the change I actually observed?” That’s a backward measurement, used to evaluate performance and compare investments.

The math is related but the use case is the opposite direction. When fund managers report “10-year CAGR of 14.2%,” they’re measuring what already happened to $10,000 invested a decade ago. They’re not projecting anything.

A practical way to think about it: you use appreciation to plan, and you use CAGR to grade.

Real-world examples

Comparing two mutual funds

Fund A turned $10,000 into $38,000 over 12 years. Fund B turned $10,000 into $29,000 over 8 years. Which performed better?

Real estate vs equities over 20 years

A property bought for $180,000 in 2004 is worth $520,000 now. A stock portfolio started at $180,000 in 2004 is now worth $680,000.

Checking if a savings plan is on track

You’re 42 and have $95,000 saved. You want $800,000 at 65. That’s 23 years. What CAGR do you need?

What a CAGR number actually means in practice

A 10% CAGR doubles your money in about 7.2 years (the Rule of 72: divide 72 by the CAGR). A 15% CAGR doubles in 4.8 years. A 20% CAGR doubles in 3.6 years. The differences sound modest. Over a 30-year horizon they’re enormous.

The gap between 8% and 12% is $2 million on a $100,000 starting investment. Over 30 years. That’s why every percentage point of CAGR matters more than it looks.

For context on benchmarks: the S&P 500 has historically returned about 10-10.5% CAGR before inflation since 1950. The Nifty 50 has returned approximately 12-14% CAGR in rupee terms over the past 20 years. Actively managed funds in the US rarely beat the index by more than 1-2 percentage points net of fees over 10+ year periods.

A CAGR above 20% sustained for 10 years puts you in the top tier of fund managers globally. Above 25% for a decade approaches Warren Buffett territory.

Common mistakes

Measuring too short a period. A fund with 48% CAGR over 18 months means almost nothing. A single bull market run can produce any short-term CAGR. Minimum meaningful period for CAGR comparison is 3 years. Five or more is better.

Using pre-fee returns. A fund that returns 14% CAGR gross but charges 1.5% annual expense ratio delivers 12.5% net. On $100,000 over 20 years, that 1.5% difference is roughly $180,000. Always use net-of-fee figures when evaluating managed funds.

Forgetting taxes. A 12% pre-tax CAGR in a taxable account is not a 12% after-tax CAGR. Depending on your tax rate and asset turnover, the after-tax figure could be significantly lower. CAGR calculated from pre-tax statements overstates what you actually kept.

Including contributions in the final value. If you added money to an investment during the measurement period, the CAGR calculation is measuring a mix of return and contributions. To get a clean CAGR, use only the return on the original investment, or use IRR if you have multiple cash flows.

Comparing CAGRs across different risk profiles. A 15% CAGR from a concentrated tech fund and a 12% CAGR from a diversified index fund are not directly comparable without knowing the volatility. The Sharpe ratio adjusts for this. CAGR alone doesn’t.

CAGR and inflation

Nominal CAGR and real CAGR are both meaningful, but they answer different questions.

Nominal CAGR measures growth in dollar terms. Real CAGR measures growth in purchasing power. A portfolio that returns 9% CAGR in a 3% inflation environment has a real CAGR of about 5.8%.

The real CAGR formula: Real CAGR = (1 + Nominal) / (1 + Inflation) − 1

For long-term planning, real CAGR is more relevant. If your goal is to maintain purchasing power in retirement, 9% nominal returns in a 4% inflation environment only grow your real wealth at about 4.8% per year. That’s what the goal-based planning needs to be built around.

For investment comparison over short periods, nominal CAGR is fine because both investments face the same inflation.

What to do with your result

If you’re measuring past performance: compare the CAGR to the appropriate benchmark for that asset class, net of fees, over the same period. A fund that returned 9% CAGR when the index returned 10.5% CAGR for the same decade isn’t just underperforming by 1.5 points. It’s underperforming by 1.5 compounding points, which in dollar terms gets substantial over decades.

If you’re planning forward: use the initial value solver. Start with your goal, enter a realistic CAGR based on your intended asset allocation, and find out what you need to invest today. Then check whether the required CAGR is achievable given the risk you’re willing to take.

If you’re comparing investments: normalize for time. Always. A higher total return over a longer period is not the same as a higher CAGR. Use CAGR to get every investment on the same annualized basis, then compare.

The bottom line

CAGR is the cleanest single number for measuring investment performance and comparing options. It’s not a prediction, and it doesn’t describe year-by-year reality. What it does is give every investment the same scale so comparisons mean something.

Use it to measure what already happened. Use the reverse modes to figure out what needs to happen. And always compare CAGR net of fees, over the same time period, to the relevant benchmark before drawing any conclusions.

The number is only useful in context. A 12% CAGR is excellent for a bond fund, mediocre for a small-cap equity fund in a strong market, and suspicious from anyone selling you anything.