# Compound Growth and CAGR Calculator > Free CAGR calculator. Enter a starting value, ending value and number of years to see the compound annual growth rate, total return and doubling time. Source: https://learn.tradelabsai.com/tools/cagr-calculator/ Track: Calculators · Level: Beginner · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "Compound Growth and CAGR Calculator", https://learn.tradelabsai.com/tools/cagr-calculator/ The compound annual growth rate, or CAGR, is the steady yearly return that would turn a starting value into an ending value over a given period. It is the standard way to compare growth across investments and time periods, because it accounts for compounding. Simply dividing a total return by the number of years overstates growth, sometimes by a lot. This calculator gives the CAGR, the total return, the misleading simple average for comparison and how long it would take to double your money at that rate. ## Calculator *Interactive calculator: use it at https://learn.tradelabsai.com/tools/cagr-calculator/* ## How it works ``` CAGR = (Ending value / Starting value) ^ (1 / Years) - 1 Years to double = ln(2) / ln(1 + CAGR) ``` Use fractions of a year for shorter periods, such as 2.5 years. If money was added or withdrawn during the period, CAGR on account balances is distorted; use time weighted returns instead. See [Measuring Returns and CAGR](https://learn.tradelabsai.com/portfolio/measuring-returns-and-cagr/). **Example: Growth from $10,000 to $18,000** An account grows from $10,000 to $18,000 in 5 years, a total return of 80%. Dividing 80% by 5 suggests 16% a year, but that ignores compounding. The CAGR is 1.8 raised to the power 0.2, minus 1, about 12.47%. Check: $10,000 times 1.1247 five times gives about $18,000. At that rate, money doubles in roughly 5.9 years. See [Compounding and Geometric vs Arithmetic Returns](https://learn.tradelabsai.com/math/compounding/). ## The rule of 72 A quick mental shortcut: divide 72 by the annual percentage return to estimate the years to double. At 8%, money doubles in about 9 years; at 12%, about 6 years. The calculator gives the exact figure. | CAGR | Years to double (approx.) | |---|---| | 4% | 17.7 | | 7% | 10.2 | | 10% | 7.3 | | 15% | 5.0 | | 25% | 3.1 | ## Why CAGR can mislead | Issue | Explanation | |---|---| | Hides volatility | Two investments with the same CAGR can have very different paths and drawdowns. See [Maximum Drawdown](https://learn.tradelabsai.com/portfolio/maximum-drawdown/) | | Sensitive to start and end dates | Starting at a market low flatters results | | Ignores cash flows | Deposits and withdrawals distort the figure | | Short periods | Annualising a few months produces unrealistic numbers | Always pair CAGR with risk measures such as volatility, Sharpe ratio and maximum drawdown. See [Sharpe and Sortino Calculator](https://learn.tradelabsai.com/tools/sharpe-and-sortino-calculator/) and [Drawdown Recovery Calculator](https://learn.tradelabsai.com/tools/drawdown-recovery-calculator/). ## CAGR versus average annual return If an investment gains 50% one year and loses 50% the next, its average annual return is 0%, but its CAGR is about minus 13.4%, and the investor has lost 25%. CAGR, a geometric average, reflects what actually happened to the money. See [Volatility](https://learn.tradelabsai.com/markets/volatility/). ## Using CAGR in planning Turn CAGR around to plan: to grow $10,000 into $50,000 in 15 years requires a CAGR of about 11.3%, which is ambitious. Seeing the required rate helps set realistic goals and recognise when promised returns are implausible. See [Time Value of Money](https://learn.tradelabsai.com/math/time-value-of-money/) and [Identifying Trading Scams](https://learn.tradelabsai.com/start-here/identifying-trading-scams/). ## Comparing two investments To compare two investments fairly, compute CAGR over exactly the same dates for both. A fund that started after a crash will show a flattering CAGR next to one that lived through it. Then look at the worst drawdown and volatility alongside each figure, so you know what each return cost in risk. A slightly lower CAGR with much smaller drawdowns is often the better choice, because it is easier to hold through bad periods without abandoning the plan. ## Frequently asked questions ### What is CAGR? The compound annual growth rate: the constant yearly return that grows a starting value into an ending value over a set number of years. ### How do I calculate CAGR? Divide the ending value by the starting value, raise the result to the power of one divided by the number of years, then subtract one. ### Is CAGR the same as average return? No. Average return is an arithmetic mean that ignores compounding; CAGR is a geometric rate that reflects actual growth. Next, see how hard it is to climb out of a loss with the [Drawdown Recovery Calculator](https://learn.tradelabsai.com/tools/drawdown-recovery-calculator/). ## Continue learning - Next lesson: [Drawdown Recovery Calculator](https://learn.tradelabsai.com/tools/drawdown-recovery-calculator/) - Previous lesson: [Expectancy and Profit Factor Calculator](https://learn.tradelabsai.com/tools/expectancy-calculator/) - Related: [Expectancy and Profit Factor Calculator](https://learn.tradelabsai.com/tools/expectancy-calculator/): Free trading expectancy calculator. Enter win rate, average win and average loss to see expectancy per trade, profit factor and break even win rate. - Related: [Measuring Returns and CAGR](https://learn.tradelabsai.com/portfolio/measuring-returns-and-cagr/): Learn how to measure trading and investment returns correctly: simple and log returns, CAGR, arithmetic versus geometric averages, and money weighted returns. - Related: [Compounding and Geometric vs Arithmetic Returns](https://learn.tradelabsai.com/math/compounding/): Compounding means returns earn returns over time. Learn the formulas, why losses hurt more than gains help, volatility drag and how it shapes position sizing. - Related: [Time Value of Money](https://learn.tradelabsai.com/math/time-value-of-money/): A dollar today is worth more than a dollar tomorrow. Learn present and future value, discounting, annuities and NPV, the maths behind bonds, valuations and options. - Related: [Maximum Drawdown](https://learn.tradelabsai.com/portfolio/maximum-drawdown/): Maximum drawdown measures the largest fall from a peak to a trough in an account or strategy. Learn how to calculate it, recovery maths, duration and how to use it. - Related: [Sharpe and Sortino Calculator](https://learn.tradelabsai.com/tools/sharpe-and-sortino-calculator/): Free Sharpe and Sortino ratio calculator. Paste your monthly, weekly or daily returns and get annualised return, volatility, Sharpe and Sortino ratios.