CAGR Calculator

Calculate the Compound Annual Growth Rate of your investments.

Investment Details

Initial Investment

₹

₹1,000₹1,00,00,00,000

Final Value

₹

₹1,000₹1,00,00,00,000

Time Period

years

1 years50 years

Compound Annual Growth Rate

+14.87%

Per year (annualized return): 5 years

Initial Value₹1,00,000

Final Value₹2,00,000

Absolute Returns₹1,00,000

Total Returns %+100%

Year-by-Year Growth

Year	Invested	Interest	Total Value
0	₹1,00,000	₹0	₹1,00,000
1	₹1,00,000	₹14,870	₹1,14,870
2	₹1,00,000	₹17,081	₹1,31,951
3	₹1,00,000	₹19,621	₹1,51,572
4	₹1,00,000	₹22,539	₹1,74,111

What is CAGR?

CAGR (Compound Annual Growth Rate) is the annualized average rate of return for an investment over a specified period longer than one year. Unlike simple average returns, CAGR accounts for the effect of compounding—it tells you what consistent yearly growth rate would be needed to take an investment from its initial to final value.

Why Use CAGR?

Compare Investments: CAGR lets you compare returns across different investments, regardless of their holding periods. A 5-year investment and a 10-year investment can be compared on equal footing using CAGR.

Smooth Out Volatility: Real investments fluctuate year-to-year. CAGR provides a single, smooth growth rate that represents the overall performance, making it easier to understand and communicate investment returns.

Measure Historical Performance: CAGR is widely used to measure the historical performance of stocks, mutual funds, real estate, and other assets. When someone says "Nifty 50 has given 12% CAGR over the last 20 years," they mean the annualized compounded return.

CAGR vs Simple Average Return

Consider an investment that goes up 100% in year 1 and down 50% in year 2. The simple average return is 25% ((100% - 50%) / 2). But if you invested ₹100, you would have ₹200 after year 1 and ₹100 after year 2—ending exactly where you started! The CAGR is 0%, which accurately reflects the actual outcome.

How CAGR Calculator Works

This calculator computes the CAGR using the standard formula. Enter your initial investment value, final value, and the number of years to find the annualized rate of return.

Formula used:

CAGR = (Final Value / Initial Value)^(1/n) - 1

Where n = Number of years. The result is expressed as a percentage.

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