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 need to grow — compounding each year — to move from its beginning value to its ending value. It irons out all the ups and downs in between into a single number. That is what 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 turn it into a percentage.
Worked example
You put ₹1,00,000 into 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×. The 80% figure sounds dramatic, but the CAGR of 12.5% per year tells you what it actually earned each year. That per-year number is far more useful when comparing with, say, a 3-year investment.
Using CAGR wisely
- Compare like with like. Judge an equity fund's 5-year CAGR against its benchmark index (e.g. the Nifty 50) over the same 5 years — not against a 1-year FD rate.
- Subtract inflation. A 9% CAGR when inflation averaged 6% leaves only ~3% real growth. The real return is what actually grows your purchasing power.
- It hides the bumps. Two investments can show the same CAGR while one swung wildly and the other grew smoothly. Pair it with a risk measure like volatility or maximum drawdown for the full picture.
- Longer periods mean more. A 1-year CAGR mostly reflects luck; a 5–10 year CAGR reflects the investment's real earning power.
- It works beyond money. CAGR also measures business revenue growth, salary growth or population growth — anywhere you need one smoothed annual rate between two points.
CAGR Calculator FAQs
What is a good CAGR for an investment?
It depends. 12–15% CAGR over a decade is excellent for Indian equities. 7–8% is typical for fixed income like PPF. And anything above inflation (roughly 5–6% in India) means your wealth is genuinely growing. Always compare a 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 — say 80% over 5 years. CAGR converts that into a per-year compounded rate — about 12.5% p.a. here. CAGR lets you fairly compare investments held for different lengths of time.
Why can't I use zero or a negative beginning value?
CAGR works on a ratio: it divides the ending value by the beginning value. A zero beginning value means dividing by zero, which is impossible. A negative one has no meaningful growth interpretation. So the calculator needs a positive starting value.
Does CAGR show the actual return I earned each year?
No. CAGR irons out the whole journey into one steady rate. An investment could swing +30% one year and −10% the next, yet show the same CAGR as one that grew smoothly. It hides volatility — which is why it works best alongside a risk measure.