CAGR Calculator — Find the Compound Annual Growth Rate
Turn any investment's start and end values into a clean per-year growth rate. Enter the beginning value, ending value and number of years to get the CAGR, total gain and growth multiple.
CAGR (per year)
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Absolute gain
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Growth multiple
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Growth trajectory
Smoothed year-by-year path at this CAGR.
What CAGR means
CAGR — Compound Annual Growth Rate — is the steady yearly rate at which an investment would have to grow, compounding each year, to go from its beginning value to its ending value. It smooths out all the ups and downs in between into one number, which makes it the standard way to compare investments held over different periods.
The CAGR formula
CAGR = (Ending Value ÷ Beginning Value)1/n − 1
Here n is the number of years. Multiply the result by 100 to express it as a percentage.
Worked example
You invested ₹1,00,000 in a mutual fund 5 years ago and it is worth ₹1,80,000 today:
CAGR = (1,80,000 ÷ 1,00,000)1/5 − 1 = (1.8)0.2 − 1 ≈ 12.47% per year
The absolute gain is ₹80,000 (an 80% total return), and the growth multiple is 1.8×. Notice how the 80% absolute return sounds dramatic, but the CAGR of 12.5% p.a. tells you what it really earned per year — far more useful for comparing with, say, a 3-year investment.
Using CAGR wisely
- Compare like with like. Compare an equity fund's 5-year CAGR with its benchmark index (e.g. Nifty 50) over the same 5 years — not with a 1-year FD rate.
- Adjust for inflation. A 9% CAGR when inflation averaged 6% is only ~3% real growth. Real return is what grows your purchasing power.
- It hides volatility. Two investments can share the same CAGR while one swung wildly and the other grew steadily. For a fuller picture, look at volatility or maximum drawdown alongside.
- Longer periods are more reliable. A 1-year CAGR mostly reflects luck; 5–10 year CAGRs reflect the underlying earning power of the investment.
- Works beyond money. CAGR also measures business revenue growth, salary growth or population growth — anywhere you want a smoothed annual rate between two points.
CAGR Calculator FAQs
What is a good CAGR for an investment?
Context matters: 12–15% CAGR over a decade is excellent for Indian equities, 7–8% is typical for PPF-like fixed income, and anything above inflation (roughly 5–6% in India) means real wealth growth. Always compare CAGR against the relevant benchmark and inflation.
Can CAGR be negative?
Yes. If the ending value is lower than the beginning value, the CAGR is negative — it tells you the average annual rate at which the investment shrank. For example, ₹1,00,000 falling to ₹80,000 over 3 years is a CAGR of about −7.2%.
What is the difference between CAGR and absolute returns?
Absolute return is the total percentage gain over the whole period (e.g. 80% over 5 years). CAGR converts that into a per-year compounded rate (e.g. 12.5% p.a.). CAGR lets you fairly compare investments held for different lengths of time.
Why can't I use zero or a negative beginning value?
CAGR is a ratio-based measure — it divides the ending value by the beginning value. A zero beginning value means division by zero, and a negative one has no meaningful growth interpretation, so the calculator requires a positive starting value.
Does CAGR show the actual return I earned each year?
No. CAGR smooths the journey into a single steady rate. An investment could have swung +30% one year and −10% the next and still show the same CAGR as one that grew steadily — it hides volatility, which is why it pairs well with risk measures.