Cannot understand the 10 year VTI growth chart on Vanguard

Question

The image below shows the performance of Vanguard Total Stock Market ETF (NYSE Arca: VTI). I cannot understand how $10,000 becomes $34,070 after 10 years with a 10-year return of 12.80%.
Shouldn't it be $10,000 * 1.128 = $11,280 ?
Is some kind of compounding happening here? What's the equation?

Flux · Accepted Answer

I cannot understand how $10,000 becomes $34,070 after 10 years with a 10-year return of 12.80%.

12.80% is the compound annual growth rate (CAGR). It is 12.80% every year for 10 years.

Shouldn't it be $10,000 * 1.128 = $11,280 ?

No. It should be

Cannot understand the 10 year VTI growth chart on Vanguard

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