CAGR Calculator

Calculate the Compound Annual Growth Rate (CAGR) of your investment. CAGR shows you the smoothed annual rate of return, making it easy to compare different investments.

Investment Details
Calculate CAGR
₹

Starting value of investment

₹

Current or ending value

5 years
1 year40 years
Growth Multiple2.50x
Absolute Return₹1,50,000
Compound Annual Growth Rate
20.11%

Your investment grew at this rate annually

Total Growth

150.0%

Time Period

5 years

Absolute Gain

₹1,50,000

Investment Journey
Year-by-year growth at 20.11% CAGR

Start

Initial investment

₹1,00,000

Year 1

After 1 year

₹1,20,112

+₹20,112

Year 2

After 2 years

₹1,44,270

+₹44,270

Year 3

After 3 years

₹1,73,286

+₹73,286

Year 4

After 4 years

₹2,08,138

+₹1,08,138

End

After 5 years

₹2,50,000

+₹1,50,000

Understanding Your CAGR

What does this mean?

Your investment of ₹1,00,000 grew to ₹2,50,000 over 5 years, achieving a compound annual growth rate of 20.11%. This means your investment grew by an average of 20.11% each year when compounded.

Performance Rating

Excellent! This is above-average performance for most equity investments.

What is CAGR (Compound Annual Growth Rate)?

CAGR is one of the most accurate ways to calculate and determine returns for individual assets, investment portfolios, and anything that can rise or fall in value over time. It provides a smoothed annual rate that accounts for the effect of compounding.

Unlike simple average returns, CAGR accounts for the compounding effect and gives you a more realistic picture of how your investment has performed. It's particularly useful for comparing investments with different time periods or volatility levels.

The CAGR Formula

CAGR = (Final Value / Initial Value)^(1/Years) - 1
  • Final Value = Ending value of investment
  • Initial Value = Beginning value of investment
  • Years = Number of years invested

When to Use CAGR

  • •Compare Investments: Compare different investments over different time periods
  • •Track Performance: Measure your portfolio's historical performance
  • •Set Goals: Set realistic return expectations for future investments
  • •Evaluate Funds: Compare mutual fund or stock performance

Frequently Asked Questions

What is CAGR (Compound Annual Growth Rate)?

CAGR is the rate at which an investment grows annually over a specified period, assuming profits are reinvested. It provides a smoothed annual rate that accounts for compounding.

How is CAGR different from average return?

CAGR accounts for compounding and gives you the geometric mean, while average return is the arithmetic mean. CAGR is more accurate for measuring investment performance over time.

Is CAGR the same as actual returns?

No, CAGR is a theoretical smoothed rate. Actual returns may vary year to year. CAGR helps compare different investments on an equal footing.

What is a good CAGR for investments?

A good CAGR depends on the asset class. Equity mutual funds typically aim for 12-15%, while debt funds may target 7-9%. Compare CAGR with relevant benchmarks.