Reverse CAGR Calculator

CAGR stands for Compound Annual Growth Rate. It represents the steady annual return that would take an investment from its starting value to its ending value over a given period. It smooths out the ups and downs of real returns into one clean number for easy comparison.

A simple average return adds up yearly returns and divides by the number of years, but this ignores compounding. CAGR accounts for the compounding effect, making it a more accurate measure of actual growth. An investment that gains 50% then loses 50% has a 0% simple average but a negative CAGR.

Enter how much you plan to invest, the growth rate you expect (based on historical averages or your own estimate), and how many years you will hold. The calculator projects the ending value assuming that rate compounds each year. This helps you set expectations for long-term investing.

The S&P 500 has historically returned about 10% per year before inflation, or roughly 7% after inflation. Individual stocks can vary widely. Using 7-10% for a diversified stock portfolio is a reasonable starting point, but past performance does not guarantee future results.

This assumes a perfectly steady growth rate every year, which never happens in practice. Real investments fluctuate, and the order of returns matters (sequence risk). It also does not account for taxes, fees, or additional contributions over time. Use it as a rough planning tool, not a prediction.