CAGR Calculator
Compound Annual Growth Rate
0.00%
Initial Value
₹0
Final Value
₹0
Duration
5 Years
Absolute Return
₹0
Abs. Return %
0%
Year-over-Year Growth at CAGR
Year-by-Year Growth Breakdown
| Year | Opening Value (₹) | Yearly Growth (₹) | Total Gain (₹) | Closing Value (₹) |
|---|
What is the CAGR Calculator?
The CAGR Calculator is a free online financial tool that helps you calculate the Compound Annual Growth Rate of your investments. CAGR represents the smoothed annualized rate of return that an investment would have earned if it had grown at a steady rate over a given period. Unlike absolute returns which simply show the total gain, CAGR accounts for the element of time, making it a much better indicator for comparing different investment options such as mutual funds, stocks, real estate, FDs, or business revenue. Whether you are evaluating past performance or projecting future growth, our CAGR calculator gives you instant, accurate results with visual charts.
How Can a CAGR Calculator Help You?
- • Evaluate Investment Performance: Determine the true annualized return on any investment — stocks, mutual funds, real estate, or business profits.
- • Compare Investment Options: Compare different assets on an equal time basis. If Stock A returned 80% in 4 years and Stock B returned 120% in 7 years, CAGR tells you which performed better annually.
- • Project Future Growth: Use past CAGR to estimate where your investment could reach in 5, 10, or 20 years.
- • Business Revenue Analysis: Track your company's revenue or profit growth over time to benchmark against competitors.
- • Financial Planning: Plan long-term goals like retirement, child education, or home purchase with realistic growth assumptions.
Note: CAGR does not indicate investment risk — two investments with identical CAGR can have vastly different volatility profiles.
How to Use the CAGR Calculator
- 1. Enter the Initial Investment amount — the value at the beginning of the period.
- 2. Enter the Final Value — the current or ending value of your investment.
- 3. Enter the Duration in years over which the investment grew.
- 4. View your CAGR percentage, absolute returns, year-by-year growth table, and visual charts instantly.
CAGR Formula
Where FV = Final Value of Investment, PV = Present (Initial) Value of Investment, n = Number of years. The result is multiplied by 100 to express as a percentage.
Practical Example
Scenario: You invested ₹1,00,000 in a mutual fund 5 years ago and the current value is ₹2,50,000.
| Input | Value |
|---|---|
| Initial Investment (PV) | ₹1,00,000 |
| Final Value (FV) | ₹2,50,000 |
| Duration (n) | 5 Years |
CAGR = (2,50,000 / 1,00,000)1/5 − 1 = (2.5)0.2 − 1 = 1.2011 − 1 = 20.11%
Absolute Return = ₹1,50,000 (150%) but the annualized growth rate is 20.11% per year.
CAGR vs Absolute Returns vs XIRR
| Metric | Best For | Considers Time? | Multiple Cash Flows? |
|---|---|---|---|
| CAGR | Lumpsum investments | Yes | No |
| Absolute Return | Quick total gain check | No | No |
| XIRR | SIP / irregular investments | Yes | Yes |
Advantages of CAGR
- ✓ Provides a smoothed, easy-to-understand annualized return rate.
- ✓ Enables fair comparison between investments of different durations.
- ✓ Globally accepted metric used by analysts, fund managers, and financial planners.
- ✓ Useful for goal-setting and future projections.
Limitations of CAGR
- ✗ Ignores volatility — doesn't show how bumpy the ride was.
- ✗ Works only for lumpsum; not suitable for SIP or irregular investments (use XIRR instead).
- ✗ Past CAGR doesn't guarantee future returns.
- ✗ Does not account for taxes, fees, or inflation.
Why Use Our CAGR Calculator?
- • 100% free — no signup, no ads, no restrictions.
- • Interactive sliders with instant real-time results.
- • Visual doughnut chart showing investment vs returns split.
- • Year-by-year growth table and line chart for detailed analysis.
- • Works on mobile and desktop — fully responsive.
Frequently Asked Questions
What is CAGR?
CAGR stands for Compound Annual Growth Rate. It measures the average annual growth rate of an investment over a specified period, assuming the profits are reinvested at the end of each year. It smooths out the volatility in year-to-year returns to give a single, easy-to-compare number. For example, if your investment grew from ₹1 lakh to ₹2 lakh in 5 years, the CAGR is 14.87% — meaning it grew at an average of 14.87% per year.
How is CAGR different from average annual return?
Simple average return adds up yearly returns and divides by the number of years, which can be misleading. For example, if a stock returns +50% in year 1 and -50% in year 2, the simple average is 0%, but you actually lost 25% of your money. CAGR would correctly show -13.4%. CAGR uses geometric compounding and always reflects the actual end result.
Can CAGR be negative?
Yes. If the final value of your investment is less than the initial value, CAGR will be negative, indicating an annual decline. For example, ₹1,00,000 shrinking to ₹70,000 over 3 years gives a CAGR of approximately -11.27%.
Is CAGR the actual return I earn each year?
No. CAGR is a hypothetical, smoothed rate. In reality, your investment may return 30% one year and lose 10% the next. CAGR tells you what constant annual rate would produce the same final result. It's a comparison tool, not a year-by-year prediction.
When should I use XIRR instead of CAGR?
Use XIRR (Extended Internal Rate of Return) when you have multiple investments at different times — such as SIP contributions, additional lumpsum top-ups, or partial withdrawals. CAGR works only for a single lumpsum investment with a single final value.
What is a good CAGR for investments?
It depends on the asset class. For Indian equities (Nifty 50), the long-term CAGR has been around 12-15%. For FDs, it's typically 6-7%. For real estate, 8-10%. A mutual fund delivering 15%+ CAGR over 10 years is considered excellent. Always compare with the benchmark and inflation rate (6-7% in India).