CAGR Calculator
Measure your investment's compound annual growth rate
What is CAGR?
Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified time period longer than one year.
It represents one of the most accurate ways to calculate and determine returns for individual assets, investment portfolios, and anything that can rise or fall in value over time.
CAGR Calculator
Calculate the Compound Annual Growth Rate of your investment.
Results
About CAGR Calculator
The Compound Annual Growth Rate (CAGR) Calculator measures the mean annual growth rate of an investment over a specified time period longer than one year. It represents one of the most accurate ways to calculate and determine returns for:
- Comparing investment performance across different assets or time periods
- Evaluating mutual fund returns over multiple years
- Analyzing business growth metrics like revenue or customer base
- Projecting future values based on historical growth rates
How to Use This Calculator
- Enter the initial value of your investment
- Input the final value of your investment
- Set the number of years the investment was held
- Click "Calculate CAGR" to see the annualized growth rate
- The chart and table will show yearly growth visualization
Example
Suppose you invested ₹10,000 in a mutual fund, and after 5 years it's worth ₹16,105:
- Beginning Value: ₹10,000
- Ending Value: ₹16,105
- Years: 5
- CAGR: 10% (calculated as (16105/10000)^(1/5) - 1)
This means your investment grew at an average rate of 10% per year over the 5-year period.
CAGR Calculation FAQs
Why use CAGR instead of average returns?
CAGR accounts for compounding effects over time, while simple averages don't. For example, a 50% loss followed by a 50% gain doesn't bring you back to the original value - CAGR reflects this accurately.
CAGR vs XIRR: Which is better for SIPs?
Use XIRR for irregular investments, CAGR for lump sums.
What’s a good CAGR for long-term stocks?
12-15% CAGR beats inflation and bank FDs.
When shouldn't I use CAGR?
CAGR isn't appropriate for investments with cash flows during the period (like regular contributions or withdrawals) or for very short time periods (less than a year). It's best for evaluating lump-sum investments over multiple years.
How does compounding affect CAGR?
CAGR accounts for compounding by nature. The "compound" in CAGR means it reflects the effect of growth building upon previous growth, which is why it's a more accurate measure than simple averages for long-term investments.