The CAGR Calculator solves for the constant annual growth rate that takes a beginning value to an ending value over a set number of years. Enter begin value, end value, and years, and the CAGR Calculator returns that compounded rate as a percent plus total growth.
Markets bounce year to year. CAGR answers a narrower question: what single annual rate, compounded, would reproduce the observed end value from the start value. The CAGR Calculator treats the path as smooth for measurement, not as a promise of future returns.
*These results are estimates for information only, not investment advice.*
Calculate the compound annual growth rate with the CAGR Calculator
The CAGR Calculator calculates compound annual growth rate from a beginning value, an ending value, and the number of years between them. CAGR is the constant rate that compounds the start into the end over that span. CAGR = (end ÷ begin)^(1 ÷ years) − 1.
From 100 to 200 over ten years, CAGR is about 7.18%, because 100 × (1.0718)^10 ≈ 200. From $10,000 to about $16,289 in 10 years, CAGR is near 5%, matching the familiar compound-interest example. The CAGR Calculator reports the rate as a percent and can show total growth (end ÷ begin − 1) beside it.
CAGR is a descriptive statistic for a completed path. The CAGR Calculator does not forecast next year’s return from that history alone.
Apply the CAGR formula with the CAGR Calculator
The CAGR formula takes the years-root of the growth multiple, then subtracts one. The CAGR Calculator applies it exactly so the result can be checked by hand. Steps for 100 → 200 over 10 years:
- Growth multiple = 200 ÷ 100 = 2.
- Raise to 1/10: 2^(0.1) ≈ 1.071773.
- Subtract 1: 0.071773 → about 7.18%.
Reversing the check: 100 × (1.071773)^10 returns 200. If the end value is below the begin value, the same formula produces a negative CAGR. The CAGR Calculator allows that decline case rather than forcing a positive rate.
Showing the substituted steps keeps CAGR from feeling like a ticker gimmick. The CAGR Calculator’s math is the standard root formula used in investment reporting.
Compare CAGR to a simple average return
A simple average of yearly percent returns often overstates growth because it ignores compounding. The CAGR Calculator contrasts CAGR with a simple average view of the same begin and end values when that comparison is shown. Simple average return in the two-point sense divides total percent growth by years: (end ÷ begin − 1) ÷ years.
For 100 → 200 over 10 years, total growth is 100%, and the simple average is 10% per year. CAGR is only about 7.18%, because compounding 7.18% each year reaches the same double, while claiming 10% each year would overshoot if those 10% gains were themselves compounded. When yearly returns vary, an arithmetic mean of the yearly percentages can sit well above the CAGR that actually connects start to finish.
The CAGR Calculator exists to keep that distinction visible. Growth tools that only show an average invite false confidence.
Calculate CAGR from 100 to 200 over ten years
Take the worked case that appears throughout growth teaching: a value that doubles in a decade. 1. Identify the values. Begin = 100, end = 200, years = 10. 2. Apply the formula. CAGR = (200 / 100)^(1/10) − 1.
3. Compute the tenth root. 2^(1/10) ≈ 1.071773.
4. Express as a percent. 0.071773 × 100 ≈ 7.18%.
So the compound annual growth rate is about 7.18%. A simple average of 10% would describe the total gain divided by years, but it is not the rate that compounds from 100 to 200. The CAGR Calculator returns the compounded figure and keeps the comparison honest when both views are displayed.
Multi-year investment reports often quote CAGR because it is comparable across different time spans. A fund that triples in 15 years and a fund that doubles in 10 years are hard to rank by total percent alone; CAGR puts both on an annualized footing. The CAGR Calculator is the hand tool for that annualization when begin, end, and years are known. It still will not tell you which fund to buy next year.
Volatile paths with the same begin and end share the same CAGR, which is both a strength and a limit. Two sequences that both go from 100 to 200 in ten years have the same CAGR even if one was smooth and one crashed mid-way. Risk sits outside the two-point formula. Use CAGR for the growth rate between checkpoints; use other tools for drawdown and volatility.
Fractional years are allowed when the span is not a round number of years: use years as a decimal, such as 2.5 for two years and six months, as long as begin and end align with those dates. The CAGR Calculator raises the growth multiple to 1 divided by that span. Misaligned dates are the usual way to get a tidy-looking rate that does not match the real holding period.
Frequently asked questions
How is CAGR calculated?
CAGR is calculated as (end ÷ begin)^(1 ÷ years) − 1. The CAGR Calculator applies that formula to the entered values. From 100 to 200 over ten years, CAGR is about 7.18%.
Can CAGR be negative?
CAGR can be negative when the ending value is below the beginning value. The CAGR Calculator reports that decline as a negative rate. The formula does not change; the growth multiple is simply less than one.
What is the difference between CAGR and a simple average return?
CAGR is a single compounded rate between two values; a simple average divides total percent growth by years or averages yearly returns without the same compounding discipline. The CAGR Calculator highlights that the simple average can overstate growth. For a double in ten years, the simple average is 10% while CAGR is about 7.18%.
Does CAGR assume money was added or withdrawn?
Standard CAGR between two portfolio values assumes no external cash flows, or that begin and end are already adjusted for them. The CAGR Calculator uses the two values and years you enter. Large deposits or withdrawals without adjustment distort the rate.
Is CAGR a forecast of future returns?
CAGR is not a forecast of future returns. The CAGR Calculator measures the constant rate that connects a past begin value to an end value. Future results can differ sharply from that historical path.
How does the CAGR Calculator relate to compound interest?
The CAGR Calculator solves for the rate in the same family of formulas that compound interest uses to grow a present value into a future value. Compound interest fixes the rate and finds the end value; CAGR fixes the end value and finds the rate. Linking both keeps the time-value story consistent across the hub.
Summary
The CAGR Calculator finds the constant annual rate that compounds a beginning value into an ending value over a stated number of years using CAGR = (end ÷ begin)^(1 ÷ years) − 1. Doubling from 100 to 200 in ten years implies about 7.18% CAGR, not a 10% simple average of the total gain.
Negative ends produce negative CAGR. The measure describes a completed path under a smooth-rate assumption and does not guarantee future performance. Compare it to averages carefully, and treat cash flows with care. Results are estimates for information only, not investment advice.