Using a CAGR Calculator in Australia: A Step-by-Step Guide
Calculates the compound annual growth rate between two values. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free CAGR Calculator.
Why it matters
Australians save and invest through bank accounts, term deposits, shares, ETFs and property. Interest and dividends are taxable, franking credits can offset tax on dividends, and inflation steadily reduces the value of money that isn’t growing.
What you need to enter
The calculator asks for 3 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Starting value ($) | 50000 |
| Ending value ($) | 80000 |
| Years | 5 |
The formula
CAGR = (end ÷ start)^(1 ÷ years) − 1.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Compound annual growth rate | 9.86% |
| Total growth | 60% |
The headline figure is 9.86% (compound annual growth rate). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the compound annual growth rate changes with starting value
The table below keeps every other input at the example value and moves only “Starting value ($)” up and down by 10% and 20%. It shows how sensitive the compound annual growth rate is to that one figure.
| Starting value ($) | Compound annual growth rate |
|---|---|
| 40,000 | 14.87% |
| 45,000 | 12.2% |
| 50,000 | 9.86% |
| 55,000 | 7.78% |
| 60,000 | 5.92% |
At 40,000 the result is 14.87%; at 60,000 it is 5.92%. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
CAGR smooths out ups and downs. Two investments with the same CAGR can have very different risk.
Keep going
Before relying on the number, read Common CAGR Mistakes (and a Better Way). You might also find these guides useful:
- Emergency Fund Calculator Explained for Australians
- How the Effective Annual Rate Calculator Works (With a Worked Example)
- Bonus Saver Account Calculator: Formula, Example and What the Result Means
Frequently asked questions
- Are investment returns guaranteed?
- Only some products, such as term deposits, have fixed rates. Share and fund returns vary and can be negative.
- Is my bank deposit protected?
- The Financial Claims Scheme guarantees deposits up to $250,000 per account holder per authorised bank.
- Is this investment advice?
- No. The calculators provide general information only.
Run your own numbers in the CAGR Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.