CAGR Calculator
Calculate the Compound Annual Growth Rate of any investment. Enter start value, end value, and period to see CAGR and absolute returns.
CAGR
20.11%
Compound Annual Growth Rate
Absolute Return
150.00%
Total Gains
₹1.50 L
How to read this
Your investment of ₹1.00 L grew to ₹2.50 L over 5 years, a CAGR of 20.11%. This means your money doubled approximately every 3.6 years (Rule of 72).
Results shown are estimates based on assumed annual returns and are for illustrative purposes only. Actual returns will vary.
What is CAGR?
CAGR - Compound Annual Growth Rate - is the smoothed yearly rate at which an investment grew from its start value to its end value over a given period. Instead of showing absolute return (which can mislead over long periods), CAGR shows the effective annual return. CAGR is the most common way to compare two investments fairly across different durations. A 60% absolute return over 3 years and a 100% absolute return over 7 years have very different CAGRs - 17% and 10% respectively.
How to use the CAGR Calculator
- Enter the initial investment value. The amount you started with on day one.
- Enter the final value. The current or maturity value.
- Enter the duration in years. Use a decimal for fractional years (e.g. 3.5).
- Read the CAGR result. The annual rate at which the investment grew.
- Compare with absolute return. Absolute return shows total growth; CAGR shows annualised growth.
Formula and method
The geometric mean. It assumes a smooth annual growth path even when actual returns were lumpy. CAGR is undefined when either value is zero or negative.
Why CAGR matters
- Fair across time periods. Compare a 3-year investment with a 10-year one on the same yearly rate.
- Used in every fund factsheet. Mutual fund 1, 3, 5, 10-year returns are all reported as CAGR.
- Easy to benchmark. A fund's CAGR can be compared with its index, FD rates or inflation directly.
- Beats absolute return for comparison. Two funds with the same final value can have very different CAGRs depending on time.
- Pairs with XIRR. XIRR is CAGR for irregular cash flows like SIPs.