A CAGR calculator finds the steady yearly growth rate that turns a starting value into an ending value. Enter where you started, where you ended and how many years it took. Or flip it around: enter a starting value and a growth rate to project a future value. Both modes show the Rule of 72 doubling time.
CAGR calculator
Compound annual growth rate
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How to use this CAGR calculator
- Choose what you want to find. Pick "Find the CAGR" if you know a start and end value, or "Find a future value" if you know a growth rate.
- Enter the starting value. Type the beginning amount: an investment, a share price, revenue or free cash flow.
- Enter the end value or the growth rate. For the CAGR, enter the ending amount. For a future value, enter the yearly growth rate you want to test.
- Enter the number of years. Use the exact time between the two values. Decimals such as 7.5 years are fine.
- Read the result. The calculator shows the CAGR or future value, the total return, the growth multiple and the Rule of 72 doubling time.
The numbers update as you type. The values prefilled above are simple illustrations: $10,000 growing to $25,000 over 8 years, and $10,000 compounding at 10% for 20 years.
The CAGR formula
Compound annual growth rate (CAGR) is the single yearly rate that, compounded, gets you from the start value to the end value. It ignores the bumps along the way and gives you one comparable number.
Future value = Start value × (1 + CAGR)Years
Total return = End value ÷ Start value − 1
Rule of 72: years to double ≈ 72 ÷ CAGR (in %)
Worked example: finding the CAGR
An investment grows from $10,000 to $25,000 in 8 years. Divide 25,000 by 10,000 to get 2.5. Raise 2.5 to the power of 1/8 (0.125) to get about 1.121. Subtract 1. The CAGR is about 12.1% a year. The total return is 150% and the money grew 2.5 times.
A classic check: $100 that becomes $200 in 10 years has a CAGR of about 7.18%. The Rule of 72 gives 72 ÷ 7.18, or about 10 years, which matches.
Worked example: projecting a future value
$10,000 compounding at 10% a year for 20 years becomes about $67,275, 6.7 times the starting amount. The Rule of 72 says money at 10% doubles about every 7.2 years, so 20 years is a little under three doublings. Three full doublings would be 8 times.
The Rule of 72
The Rule of 72 is a mental shortcut: divide 72 by the growth rate to estimate how many years it takes to double. At 6% that is 12 years. At 12% it is 6 years. It is most accurate for rates between about 6% and 10%, and the calculator also shows the exact doubling time so you can see the gap. The rule is useful for a gut check. If a company says it can double revenue in three years, the rule says that takes about 24% growth a year. The exact figure is closer to 26%.
How investors use CAGR
- Investment returns. Compare the growth of two holdings over different periods on equal terms. For returns that include dividends, use total shareholder return figures as the start and end values.
- Business growth. Measure how fast revenue, earnings per share or free cash flow has grown over 5 or 10 years. This tells you far more than a single year's growth rate.
- Reality checks on valuation. If a reverse DCF says the price needs 15% yearly free cash flow growth, compare that with the company's actual 10-year free cash flow CAGR.
- Setting DCF assumptions. A past growth CAGR is a sensible anchor for the growth inputs in a DCF calculator.
- Dividend growth. The CAGR of a dividend per share over a decade shows how quickly your income has been rising. See dividend yield vs dividend growth.
How to pick the start and end values
For an investment, use the value on the day you bought and the value today, or two year-end values. For a business metric, use full fiscal years or trailing twelve month figures at both ends, never a mix of a quarter and a year. Try more than one window. A 3, 5 and 10 year CAGR side by side shows whether growth is speeding up or slowing down, which is often more useful than any single number. If the starting year was unusually weak, such as a recession year, the CAGR will flatter the business, so check one year either side. And when a company made a large acquisition during the period, remember that some of the growth was bought rather than built.
CAGR vs average annual return
These two numbers are often confused, and the difference matters. The average annual return adds up each year's return and divides by the number of years. CAGR is the rate that actually compounds to your ending value.
Suppose a stock rises 50% one year and falls 50% the next. The average annual return is 0%. But $10,000 becomes $15,000 and then $7,500. You lost 25%, and the CAGR is about -13.4% a year. Whenever returns swing around, the average overstates what you really earned. CAGR tells you what happened to your money.
Common mistakes
- Cherry-picking the start and end dates. Starting at a market bottom or ending at a peak can make a mediocre investment look great. Try several periods.
- Getting the years wrong. From the end of 2016 to the end of 2024 is 8 years, not 9. Count the gaps between values, not the number of values.
- Leaving out dividends or deposits. Share price CAGR ignores dividends. And if you added money along the way, a simple CAGR of your account balance overstates your returns.
- Using a negative starting value. CAGR cannot handle a move from a loss to a profit. Use a different measure, such as the change in margin.
- Assuming the past CAGR will repeat. A business that grew 25% a year while small will almost always slow down as it gets bigger. See company lifecycle phases.
Limitations
CAGR is a smoothed number. It hides volatility, so two investments with the same CAGR can have given you very different rides. It depends heavily on the two endpoints you choose. And a future value projection is only as good as the growth rate you assume. Garbage in, garbage out. Use CAGR to compare and to sanity-check, and pair it with the story of the business and your time horizon.
See real growth rates without the math
Stock Simplifier calculates growth rates from real financial data (sourced from Fiscal.ai). The growth charts show 3, 5 and 10 year CAGRs for revenue and earnings, and the price chart on a stock's overview shows its return and CAGR over the period you choose, next to the S&P 500, with an option to include dividends. The Free plan includes 5 years of financial statements for 10,000+ stocks. Standard and Pro extend that to 20 years, which is what you need for a true 10-year growth rate.