CAGR Calculator
A CAGR calculator is a free online tool that computes the Compound Annual Growth Rate of an investment — showing the true annualized return over a period, even if the investment grew unevenly.
Year-wise Growth (at 11.61% CAGR)
| Year | Value | Gain |
|---|---|---|
| Year 0 | ₹1,00,000 | ₹0 |
| Year 1 | ₹1,11,612 | ₹11,612 |
| Year 2 | ₹1,24,573 | ₹24,573 |
| Year 3 | ₹1,39,039 | ₹39,039 |
| Year 4 | ₹1,55,185 | ₹55,185 |
| Year 5 | ₹1,73,205 | ₹73,205 |
| Year 6 | ₹1,93,318 | ₹93,318 |
| Year 7 | ₹2,15,767 | ₹1,15,767 |
| Year 8 | ₹2,40,822 | ₹1,40,822 |
| Year 9 | ₹2,68,788 | ₹1,68,788 |
| Year 10 | ₹3,00,000 | ₹2,00,000 |
CAGR smooths out volatility. Actual yearly returns will vary.
How to use CAGR Calculator
- Enter initial value — Type the starting investment value.
- Enter final value — Type the current or maturity value.
- Enter duration — Enter the number of years.
- See CAGR — View the annualized growth rate.
Key features
- CAGR calculation
- Total return display
- Absolute vs annualized returns
- Year-wise growth projection
- Formula shown
- Works for any investment
What is CAGR?
CAGR (Compound Annual Growth Rate) is the rate at which an investment would have grown if it had grown at a steady rate every year. It's the most honest way to compare investments because it accounts for time. A stock that went from ₹100 to ₹200 in 5 years has a CAGR of 14.87% — not the 100% absolute return it shows on paper. CAGR cuts through volatility to reveal true performance.
The CAGR Formula
CAGR = ((Final Value / Initial Value)^(1 / Years) - 1) × 100. For example: ₹1 lakh grew to ₹2 lakh in 5 years. CAGR = (2/1)^(1/5) - 1 = 1.1487 - 1 = 0.1487 = 14.87%. This single number tells you how fast your money grew on average each year. It's the number fund managers and analysts use to compare investments.
CAGR vs Absolute Return
Absolute Return: (Final - Initial) / Initial × 100. Shows total growth. CAGR: annualized growth. If you invested ₹1 lakh and it became ₹3 lakh in 10 years — Absolute Return = 200%. CAGR = 11.61%. The absolute return looks bigger but CAGR tells you the real annual performance. Always compare investments using CAGR, especially when durations differ.
Where CAGR is Used
Comparing mutual fund returns across different periods. Evaluating stock performance over years. Assessing real estate appreciation. Benchmarking business revenue growth. Analysing portfolio returns. Any investment where you want to know: 'What did this earn on average per year?' CAGR isn't perfect (it ignores volatility), but it's the most useful single metric for long-term comparison.
Pro tips
- Use CAGR to compare funds with different holding periods
- CAGR ignores volatility — always check both CAGR and max drawdown
- For 10+ year equity investing, 12-15% CAGR is a realistic target
- Rule of 72: Years to double = 72 / CAGR
Common use cases
- Comparing mutual fund returns
- Evaluating stock performance
- Assessing real estate appreciation
- Benchmarking business growth
- Portfolio performance analysis
Frequently asked questions
What is CAGR?+
CAGR (Compound Annual Growth Rate) is the annualized return of an investment over a period, assuming it grew at a steady rate.
What's the CAGR formula?+
CAGR = ((Final / Initial)^(1/Years) - 1) × 100.
How is CAGR different from absolute return?+
Absolute return shows total growth (e.g., 100%). CAGR shows annualized growth (e.g., 15%/year).
Why use CAGR?+
It smooths out volatility and gives a fair comparison between investments held for different durations.
What's a good CAGR?+
Equity mutual funds: 12-15% historically. Debt funds: 6-8%. Real estate: 8-10%. FDs: 6.5-7.5%.
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