CAGR Calculator
CAGR (Compound Annual Growth Rate) expresses an investment's growth as a single smoothed annual rate — useful for comparing a single lump-sum investment across different time periods.
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What is the CAGR Calculator?
CAGR answers a simple question: "if this investment had grown at one steady rate every year, what would that rate have been?" Real investments rarely grow in a straight line — a mutual fund might be up 30% one year and down 10% the next — so CAGR smooths that path into a single comparable annual figure, making it easy to compare a stock, fund or FD held over different time periods on equal footing.
How to Calculate
You need just three numbers: what the investment was worth at the start, what it's worth now (or at exit), and how many years it was held. CAGR only looks at the start and end points — it doesn't account for any additional money added or withdrawn in between, so it's accurate for a single lump-sum investment but misleading for SIPs or accounts with multiple transactions.
Formula
CAGR = (Ending Value / Beginning Value)1/years − 1
CAGR is only valid for a single entry, single exit investment. If you added or withdrew money at different points in time (like a SIP or SWP), CAGR will give a misleading answer — use XIRR instead, since it correctly accounts for the timing of each cash flow.
Worked Examples
Example 1 u2014 3-year growth
₹1,00,000 → ₹1,50,000 over 3 years: CAGR ≈ 14.47% per year.
Example 2 u2014 Comparing two investments
Investment A doubles in 5 years (CAGR ≈ 14.9%); Investment B grows 60% in 3 years (CAGR ≈ 16.96%). Despite the smaller total gain, B compounds faster per year — which is exactly what CAGR reveals.
Definitions
- Beginning Value
- The investment's value at the start of the period.
- Ending Value
- The investment's value at the end of the period.
- Number of Years
- The length of the holding period, used to annualize the growth.
- CAGR
- Compound Annual Growth Rate — the single smoothed annual rate that would take the beginning value to the ending value. Valid only for a single lump-sum investment.
How to Use
- Enter the beginning value of your investment.
- Enter the ending (current or final) value.
- Enter the number of years between the two values.
- Read the CAGR and the absolute rupee gain instantly.