CAGR Calculator
A stock that jumped 40%, crashed 25%, then doubled didn't grow at the "average" of those years. CAGR finds the one smooth rate that turns your start into your finish — the only growth number that describes what actually happened to your money.
Your inputs
Growth at the CAGR, year by year
Year-by-year at the CAGR
| Year | Value | Gain that year |
|---|
CAGR vs average return: the volatility trap
The arithmetic average of yearly returns lies when returns swing. +50% then −50% averages 0% — but $100 → $150 → $75. You lost a quarter of your money at "0% average return." CAGR tells the truth: (75 ÷ 100)^(1/2) − 1 = −13.4%. The wider the swings, the bigger the gap — this is volatility drag, and it's why CAGR, not the average, is the number that describes your wealth.
Total return = ending ÷ beginning − 1
Rule of 72: doubling years ≈ 72 ÷ CAGR%
Worked example
$10,000 → $25,000 over 10 years. (25,000 ÷ 10,000)^(1/10) − 1 = 2.5^0.1 − 1 = 9.60% CAGR. Total return 150%, a 2.5× multiple. Rule-of-72 cross-check: 72 ÷ 9.6 ≈ 7.5 years to double — and 1.096^7.5 ≈ 2.0, confirming the math from both directions.
What CAGR doesn't know
- Mid-period cash flows break it. Deposits or withdrawals during the period need XIRR (money-weighted return), not CAGR. This assumes one lump sum, untouched.
- Dividends must be included. For stocks, use total-return figures (price + reinvested dividends), or you're measuring price appreciation, not your return.
- It's backward-looking. A great 10-year CAGR says nothing about the next 10 years — past performance, etc.