Calculator
Example data
These examples show how the calculator behaves with typical inputs.
| Scenario | Beginning value | Ending value | Years | Estimated CAGR |
|---|---|---|---|---|
| Broad index growth | $10,000 | $18,500 | 5 | 13.09% |
| Steady multi-year climb | $15,000 | $22,000 | 4 | 10.05% |
| Longer horizon compounding | $5,000 | $9,500 | 7 | 9.60% |
Formula used
CAGR converts total growth into a single annualized rate:
CAGR = ( Ending Value / Beginning Value )1 / Years − 1
Net CAGR is an optional estimate after an annual expense ratio. Choose “Divide factor” for a closer approximation, or “Subtract” for a simple shortcut.
Real CAGR adjusts for inflation using: Real = (1 + Net) / (1 + Inflation) − 1
How to use this calculator
- Enter your beginning and ending values for the index fund period.
- Provide years, or set start and end dates to auto-calculate.
- Optionally add expense ratio and inflation for net and real results.
- Set projection years to estimate future value from today’s ending value.
- Click Calculate. Download CSV or PDF if needed.
FAQs
1) What does CAGR tell me?
CAGR is the constant yearly rate that links your beginning value to your ending value over the period. It smooths volatility, so it is best for comparing different time spans or funds on an annualized basis.
2) Is CAGR the same as average annual return?
Not always. Average annual return is typically the arithmetic mean of yearly returns. CAGR is a geometric measure that accounts for compounding, so it often gives a more realistic long-term growth rate.
3) Should I use dates or years?
Use dates when you know the exact start and end points, because the calculator converts the time difference into fractional years. Use years when you only have a rounded holding period.
4) Do I include dividends?
If your ending value includes reinvested dividends, you already have a total-return result. If you only used price values, your CAGR may understate performance. Whenever possible, use total-return data for index funds.
5) How accurate is the expense ratio adjustment?
It’s an estimate. Many published fund returns already reflect fees. If you set an expense ratio on top of net-of-fee returns, you may double-count. Use it mainly to explore “what if” comparisons across similar products.
6) What does “Real CAGR” mean?
Real CAGR adjusts your growth rate for inflation, estimating purchasing-power growth. For example, a 12% net CAGR with 6% inflation yields a lower real CAGR, representing how much your wealth grew in “today’s money.”
7) Why might CAGR be misleading with contributions?
CAGR assumes one lump sum at the start. If you add money over time, a money-weighted return (IRR) is usually better. CAGR can still help when you want a simple benchmark for the overall period.
8) Can I use this for negative returns?
Yes, as long as both values are positive. If your ending value is lower than the beginning value, CAGR becomes negative. The calculator prevents zero or negative inputs because they break the log-based compounding model.
Disclaimer: This tool is for education and comparison. It does not account for taxes, transaction costs, or tracking error.