CAGR Calculator

How this result is built

Calculate the compound annual growth rate between a beginning value and an ending value.

CAGR is the steady annual rate that would carry the beginning value to the ending value. It smooths the path. A bumpy investment that started at $10,000 and ended at $18,000 over six years has one CAGR, even if one of those years was ugly.

What the opening example is for

It does not know about cash you added in the middle. If you contributed along the way, CAGR overstates the investment’s own return. Use IRR with the cash flows instead.

The walkthrough below uses the numbers already sitting in CAGR Calculator. Press Calculate and the headline should match this page. Then put your own figures in. The math does not run until you press the button, and Clear hides the result.

What each field is doing

The “Beginning value” line on CAGR Calculator starts at $10,000.00. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

CAGR Calculator treats “Ending value” as its own entry, and the form opens with $18,000.00. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

Before you replace it, “Years” reads 6 on CAGR Calculator. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

The opening result, line by line

Press Calculate on the opening form and CAGR is 10.29%. That is the number the rest of this section is talking about.

Total growth is 80.00% when you run the opening figures on CAGR Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, beginning is $10,000.00. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

How those lines were produced

CAGR Calculator reports that ending is $18,000.00. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

The formula line on the page is CAGR = (Ending / Beginning)^(1/years) − 1. It is there so you can see the relationship the buttons are using. A schedule, when the page draws one, is that same series written row by row.

A second pass changes only “Beginning value”, from $10,000.00 to $11,000.00. CAGR moves from 10.29% to 8.55%. Nothing else on the form was edited, so the gap between those two results is the effect of that one field on CAGR Calculator. If the gap is tiny, this page is not very sensitive to that entry. If the gap is large, get that entry from a document before you plan around the result.

What this page will not claim

CAGR Calculator compounds the rate you type. Markets do not pay a flat rate, and a fund fee comes out of the return before you should type it. The page is the equation, not a forecast and not a recommendation to buy or sell.

CAGR Calculator stops at its own formula. When the next question is different, open Average Return Calculator (Simple average beside the compound average.); ROI Calculator (Total ROI and the annualized rate.); Investment Calculator (Starting balance plus a monthly contribution.). Do not add those results to this one as if they were the same kind of dollar.

Check the result before you use it

Start on CAGR Calculator by reading the labels, not the headline. The opening labels are Beginning value ($10,000.00), Ending value ($18,000.00), Years (6). If a label is not the fact you have, the result cannot turn into that fact later. The illustration on the form lands on 10.29%. When you press Calculate and see that same figure, the button and this explanation are using one formula.

Change one field at a time. Write down the headline, edit a single line, and press Calculate again. A large jump means that line carries the result. A line that does not move is a line the formula ignores, which is a reason to confirm you opened the right page. CAGR Calculator is built for one job: One smooth rate between two values. The description on the page says the same thing in a sentence: Calculate the compound annual growth rate between a beginning value and an ending value.

When the paperwork disagrees

Then hold the headline next to a source outside the site. That source might be a loan estimate, an account statement, a pay stub, or the public limit named in the methodology. A few cents of difference on a long schedule is ordinary rounding. A different rate, a fee you never typed, or a tax the form does not ask for is not rounding. Correct the input. Do not average the page with the paperwork.

When the outside source still disagrees, CAGR Calculator has reached the edge of what it will claim. It will not phone a lender, pull a county record, or apply a credit you left blank. Send the calculator name, every input, and the result you expected through the contact page if you think the formula itself is wrong. Until that is settled, read 10.29% as the output of the fields above and nothing else.

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