About the CAGR Calculator
What is the CAGR Calculator?
CAGR (Compound Annual Growth Rate) is the constant yearly rate at which an investment would have grown from its starting value to its ending value, as if it had compounded smoothly every year. It removes the ups and downs in between and gives one comparable number.
Enter the beginning value, the ending value and the number of years (fractions such as 2.5 are allowed). CAGR is the right way to compare investments held for different periods — a stock, a mutual fund, a property or a company's revenue.
How to use the CAGR Calculator
- Beginning Value (₹) (sample: 1,00,000)
- Ending Value (₹) (sample: 1,80,000)
- Period (Years) (sample: 5)
- Press Calculate CAGR (results also refresh as you type). The result card shows the Annualized Return, along with Absolute Growth, Beginning Value and Ending Value.
Formula used
CAGR = (Ending value ÷ Beginning value)^(1 ÷ n) − 1
- n = the number of years between the two values
Absolute growth = ending value − beginning value. CAGR assumes no money was added or withdrawn during the period; for investments with regular cash flows use the XIRR Calculator.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Beginning Value (₹) | 1,00,000 |
| Ending Value (₹) | 1,80,000 |
| Period (Years) | 5 |
| Result | Value |
|---|---|
| CAGR (Annualised Return) | 12.47% |
| Absolute Growth | ₹80,000 |
| Beginning Value | ₹1,00,000 |
| Ending Value | ₹1,80,000 |
Tips for using the CAGR Calculator
- CAGR hides volatility — two investments with the same CAGR can have very different risk.
- For SIPs and investments with multiple cash flows, CAGR is misleading; use XIRR instead.
- Compare a fund's CAGR with its benchmark index over the same period.