How reverse CAGR works
The standard CAGR calculator answers “how fast did this grow?” A reverse CAGR calculator answers “where will this end up?” It applies one steady annual rate to a starting value for a set number of years:
Future value = Starting value × (1 + CAGR)^YearsAt 12% a year, $10,000 becomes $17,623 after five years and $31,058 after ten. The second five years add more than twice as much as the first five, because growth is earned on growth — that is compounding, and it is why small differences in the rate matter so much over long periods.
Working backwards to a starting amount
To find how much you need today to reach a goal, divide instead of multiply:
Starting value = Target ÷ (1 + CAGR)^YearsReaching $100,000 in ten years at 8% a year needs $46,319 invested now. At 6% it needs $55,839. Try a few rates in the calculator to see how sensitive the result is to your assumption.
Choosing a realistic growth rate
- Use history as a guide, not a promise. Calculate the historical CAGR of the asset first, then test lower rates too.
- Think in real terms for long goals. A 10% nominal projection with 4% inflation is about 5.8% of real growth. Test your projection in real terms as well as nominal.
- Remember fees and taxes. A 1% yearly fee cuts a 30-year result by roughly a quarter.
- Match the rate to your portfolio mix. An all-equity portfolio and a 60/40 portfolio deserve very different growth assumptions. Settle the mix first, then project it here.
Reverse CAGR questions
What is a reverse CAGR calculator?
It runs the CAGR formula backwards. Instead of finding the growth rate from two values, it takes a starting value and a growth rate and tells you the ending value: Future value = Start × (1 + CAGR)^Years.
How do I find the starting value needed to reach a target?
Divide the target by the growth factor: Start = Target ÷ (1 + CAGR)^Years. To reach $100,000 in 10 years at 8% a year you need $46,319 today.
What is the Excel formula for reverse CAGR?
Use =Start*(1+Rate)^Years, or =FV(Rate, Years, 0, -Start). For the starting value, use =PV(Rate, Years, 0, -Target).
Should I use a nominal or real growth rate?
Use a nominal rate to project the number you will see on a statement, and a real (after-inflation) rate to project what that money will buy. Subtracting your expected inflation rate from the growth rate is a close approximation.