CAGR Calculator

Calculate Compound Annual Growth Rate for your investments. Compare returns across different asset classes.

Calculate CAGR

Initial Investment Value

₹

Final Investment Value

₹

Time Period (Years)

CAGR Formula: CAGR = (Final Value / Initial Value)^(1/n) - 1
Where n = number of years. CAGR shows the smoothed annual rate of return.

Growth Visualization

Results

24.57%CAGR

Initial Investment₹1.00 L

Final Value₹3.00 L

Total Growth₹2.00 L

Growth Percentage200.00%

24.57%

CAGR

5 Years

Time Period

200%

Total Growth

40.0x

Money Multiplier

Compare with Benchmarks

NIFTY 50 (10Y)

12.5%

✓ Beating

Bank FD

6.5%

✓ Beating

Gold (10Y)

9.5%

✓ Beating

PPF

7.1%

✓ Beating

Inflation

5.5%

✓ Beating

Year-wise Growth Table

Year	Investment Value	Growth from Start
Year 0	₹1.00 L	-
Year 1	₹1.25 L	+₹24.57 K (24.6%)
Year 2	₹1.55 L	+₹55.19 K (55.2%)
Year 3	₹1.93 L	+₹93.32 K (93.3%)
Year 4	₹2.41 L	+₹1.41 L (140.8%)
Year 5	₹3.00 L	+₹2.00 L (200.0%)

What is CAGR Calculator, and How Does it Help You

Compound Annual Growth Rate (CAGR) is the representation of the rate at which an investment would have grown if it had grown at a steady rate over a period, assuming the profits were reinvested at the end of each year. Unlike average annual returns, CAGR accounts for compounding and volatility, providing a more realistic performance measure.

The CAGR Calculator is a simple, precise financial tool designed to calculate the annualized growth rate of your investments (like mutual funds, stocks, or real estate) over a specific time horizon.

Annualized Rate Check

Convert erratic annual gains or losses into a single, standardized compound annualized rate.

Investment Evaluation

Compare performance across different asset classes on a normalized timeline.

Target Projections

Identify the required compound annual growth rate needed to reach your target corpus.

How Does the CAGR Calculator Work?

The CAGR Calculator solves for the compound growth rate that links the initial purchase value and the final matured value over the given tenure.

CAGR = (End Value / Start Value)^(1 / t) - 1

End Value: Maturity or current valuation of the investment

Start Value: Initial capital or buy price of the investment

t: Time period of the investment in years

CAGR: Compound Annual Growth Rate

If you invested ₹10,00,000 in a mutual fund, and it grew to ₹20,00,000 over 5 years, the calculator computes: CAGR = (2,00,000 / 1,00,000)^(1/5) - 1 = (2)^0.2 - 1 = 14.87%. This means your investment grew at an annualized rate of 14.87% compounded yearly.

How to Use CAGR Calculator

Using the CAGR Calculator is extremely simple and takes just a few seconds. Follow these steps:

Enter Initial Investment

Type in the starting value (purchase price) of your asset or investment portfolio.

Enter Final Value

Input the final matured value or current market valuation of the investment.

Specify Time Period

Enter the total duration (in years) between the initial and final valuations.

Advantages of Using CAGR Calculator

✓ Smooth Volatility Bias

CAGR smooths out intermediate fluctuations, letting you see the underlying growth trend.

✓ Normalized Comparisons

Compare a volatile equity fund with a steady fixed deposit by reducing both to their CAGR.

✓ Simple Wealth Tracking

Evaluate if your portfolio is meeting your target return rate to adjust allocations.

✓ Accurate Mathematical Basis

Eliminates errors made by simple arithmetic averaging of annual returns.

Frequently Asked Questions

CAGR is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance over a specified period, assuming profits were reinvested at the end of each year. It represents a smoothed annual rate of return that ignores volatility and provides a consistent growth rate.

CAGR is calculated using the formula: CAGR = (Final Value / Initial Value)^(1/n) - 1, where n is the number of years. For example, if ₹1,00,000 grows to ₹3,00,000 in 5 years, CAGR = (300000/100000)^(1/5) - 1 = 24.57%.

A good CAGR depends on the asset class and risk involved. NIFTY 50 has historically delivered 12-15% CAGR. Bank FDs offer 6-7%, while aggressive equity funds may target 15-20%. Always compare CAGR with inflation (5-6%) to understand real returns.

Average return is a simple arithmetic mean of yearly returns, while CAGR accounts for compounding. For volatile investments, average return can be misleading. CAGR provides the actual growth rate you experienced, considering the compounding effect.

Yes, CAGR can be negative if your final investment value is less than the initial value. A negative CAGR indicates that your investment lost value over the period. For example, if ₹1,00,000 becomes ₹60,000 in 5 years, CAGR would be approximately -9.71%.

CAGR allows you to compare investments of different durations and volatility on an equal footing. Whether you're comparing a 3-year stock investment with a 10-year mutual fund, CAGR gives you a standardized annual rate to evaluate which performed better.

CAGR has limitations: (1) It assumes constant growth rate, ignoring volatility (2) Doesn't reflect interim performance or cash flows (3) May not be suitable for SIP investments (4) Doesn't account for taxes or fees (5) Past CAGR doesn't guarantee future returns.

For SIP investments with multiple cash flows, CAGR isn't the best measure. Use XIRR (Extended Internal Rate of Return) instead, which accounts for irregular cash flows. CAGR is ideal for lumpsum investments with a single initial investment.

CAGR is a simplified measure for lumpsum investments with single initial and final values. IRR (Internal Rate of Return) is more comprehensive and handles multiple cash flows at different times. For complex investments with deposits/withdrawals, use IRR.

CAGR helps in setting realistic investment targets. If you need ₹1 crore in 15 years and have ₹10 lakhs now, you need approximately 16.6% CAGR. This helps you choose appropriate investment vehicles and assess if your goals are achievable.

Historical CAGR ranges: Savings Account (3-4%), FDs (6-7%), PPF (7-8%), Gold (8-10%), Large Cap Funds (10-12%), NIFTY 50 Index (12-15%), Mid Cap Funds (12-15%), Small Cap Funds (15-18%). These are indicative and past performance doesn't guarantee future returns.

For stocks, take the initial purchase price (adjusted for splits/bonuses) and current price. Apply the formula: CAGR = (Current Price/Purchase Price)^(1/years held) - 1. Include dividends for total return CAGR by adding dividend yield to the price appreciation.