CAGR Calculator — Find the Compound Annual Growth Rate
Calculate the Compound Annual Growth Rate (CAGR) of any investment. Enter the initial value, final value, and duration to find the annualized return percentage.
analyticsCAGR Result
Educational illustration only. Past performance does not guarantee future returns.
functionsCAGR Formula Used
This calculator uses the standard Compound Annual Growth Rate formula:
Where:
- Ending Value = Final value of the investment
- Beginning Value = Initial value of the investment
- n = Number of years
How Does a CAGR Calculator Work?
CAGR (Compound Annual Growth Rate) measures the annualized rate of return of an investment over a given time period, assuming the profits were reinvested at the end of each year. Unlike simple average returns, CAGR smooths out the volatility and gives you a single percentage that represents steady year-over-year growth.
For example, if you invested ₹1,00,000 in a mutual fund and it grew to ₹2,50,000 in 5 years, the CAGR would be approximately 20.11%. This means your investment effectively grew at 20.11% per year compounded, even though the actual year-to-year returns may have varied significantly.
CAGR is widely used to compare the performance of different investments — stocks, mutual funds, fixed deposits, real estate, or gold — over the same time period. It is also useful for evaluating business revenue growth, portfolio performance, and setting realistic return expectations for future investments.
workspace_premiumBenefits of Using a CAGR Calculator
Compare Investments
Compare the annualized returns of different investments — mutual funds, stocks, FDs, gold, real estate — over the same or different time periods on a level playing field.
Measure True Growth
CAGR gives you the real compounded return, not just simple average. It accounts for the effect of compounding and provides a more accurate picture of investment performance.
Set Return Expectations
Use historical CAGR of asset classes to set realistic expectations for future investments. Equity funds in India have historically delivered 12-15% CAGR over 10+ year periods.
Evaluate Fund Managers
Compare the CAGR of a mutual fund against its benchmark index. If the fund consistently delivers higher CAGR, the fund manager is adding value through active management.
help_outlineFrequently Asked Questions
What is CAGR and why is it important?
CAGR (Compound Annual Growth Rate) is the annualized rate of return that an investment would need to grow from its beginning value to its ending value over a specified period. It is important because it smooths out year-to-year volatility and provides a single, comparable growth rate. This makes it easy to compare different investments, regardless of their actual yearly fluctuations.
How is CAGR different from average annual return?
Average annual return simply adds up yearly returns and divides by the number of years. CAGR accounts for the compounding effect. For example, if an investment returns +50% in year 1 and -25% in year 2, the average return is 12.5%, but the CAGR is only 6.07% (₹100 → ₹150 → ₹112.50). CAGR reflects what actually happened to your money.
What is a good CAGR for investments in India?
It depends on the asset class. Historically in India: equity mutual funds have delivered 12-15% CAGR over 10+ years, Nifty 50 index has given around 11-13% CAGR, fixed deposits offer 6-7% CAGR, gold has delivered 8-10% CAGR, and real estate varies by location (7-12% CAGR). Higher CAGR typically comes with higher risk.
Can CAGR be negative?
Yes. If your final investment value is less than the initial value, the CAGR will be negative — indicating that your investment lost value on an annualized basis. For example, if ₹1,00,000 became ₹80,000 over 3 years, the CAGR would be approximately -7.17%.
What are the limitations of CAGR?
CAGR does not show the volatility or risk involved in reaching the final value. Two investments can have the same CAGR but very different risk profiles. It also assumes you stayed invested for the entire period. Additionally, CAGR does not account for additional investments or withdrawals during the period — it only considers the starting and ending values.
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Pair this calculator with our educational guides for smarter investment decisions. What is Mutual Fund? · What is SIP? · FD vs Mutual Fund · Index Funds vs Active Funds
This CAGR calculator is for educational and illustrative purposes only. CAGR represents past performance and does not guarantee future returns. It does not reflect interim volatility, additional investments, or withdrawals. Always consult a SEBI-registered financial advisor before making investment decisions.
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