Finance

Home Compound Annual Growth Rate Calculator (10 Years)

Calculate compound annual growth over a period. This home version uses a 10-year planning term as its starting point.

The result labelled CAGR is the steady yearly growth rate that would take the starting value to the ending value if growth were perfectly even every year, so a CAGR of 7.18% over 10 years describes a smooth average pace, not a rise that happened by that amount in any single year.

Formula

CAGR equals ending value divided by starting value, to the power of one over years, minus one.

How it works

CAGR smooths growth into a single yearly rate, even if actual yearly growth varied.

Worked example

Starting value $10,000, ending value $20,000, term 10 years. Using the page formula, CAGR equals $20,000 divided by $10,000, to the power of one over 10, minus one, which is 7.18% a year. That is the calculator's own result for these defaults, and it is the steady yearly rate that would grow $10,000 to $20,000 over 10 years if growth were perfectly even every year.

Note that 7.18% is lower than the simple average of 10.00% a year, which just divides the 100% total gain by 10 years. The simple average ignores compounding, so it overstates the steady rate; the CAGR figure is the one that actually reproduces the doubling when compounded year after year.

Who this term suits for a home household: A home household tracking a home bought a decade ago, for example comparing what the home was worth at purchase with a recent valuation, to see the steady yearly pace behind the total gain.

FAQs

What does CAGR mean?
CAGR is the steady yearly growth rate that would take a starting value to an ending value.

Is this home calculator exact?
No, it is an estimate for planning only, based on the numbers you enter.

Are these figures financial advice?
No, they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Is 7.18% a year a good result for a home over 10 years?
It depends on the local market and on costs: 7.18% a year doubles the value in 10 years before fees, maintenance and taxes, which is a strong result in most housing markets.

Why does the same doubling take a lower rate over 10 years than over 5 years?
Because compounding has twice as long to work, so a smaller yearly rate is enough to double $10,000 to $20,000 over 10 years.

Does this 10-year rate include home improvement spending?
No. If money was spent on renovations during the 10 years, the true return is lower, because that spending also has to be counted.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.