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CAGR Calculator

Calculate the Compound Annual Growth Rate of your investment.

Effective Returns:

Total Gains₹2,000
CAGR4.66%
Absolute Returns20%

Input fields:

Total Investment
₹
Final Value
₹
Duration (Years)

About Compound Annual Growth Rate Calculator

CAGR (compound annual growth rate) gives you a smooth picture of how your money grows, one year at a time, much better than just looking at regular total growth. It considers the compounding effect and shows a more accurate picture of how your money has been or might be growing. When you are planning for the future or making important money decisions, the CAGR calculator is your helpful guide. Example: Imagine you invested Rs.2,000. Fast forward 5 years and it has multiplied into Rs.5,000. At first glance, it seems like a growth of Rs.600 per year, which is 30% per year. However, using the CAGR formula [(Final Value / Initial Value) ^ (1 / Number of Years) - 1], the real growth rate is approximately 20.11%. Thus, this CAGR calculator is a tool that will help you assess the compounding effect correctly.

Formula to calculate Compound Annual Growth Rate

CAGR = ((Vfinal / Vinitial) ^ (1/t)) - 1 Vfinal = Final Value Vinitial = Beginning Value T = Time in years

How Our CAGR Calculator Can Help You?

a) Helps you understand the consistent growth rate of your investments with precise CAGR calculations. b) Compare the CAGR of different investment options, including mutual funds, stocks, and bonds. c) Helps you set realistic and achievable financial goals. d) Helps you get insights into different investment strategies like SIPs and lump sums and optimize your portfolio.
Total Investment
Gains

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FAQs

CAGR = ((Vfinal / Vinitial) ^ (1/t)) - 1, where Vfinal is the Final Value, Vinitial is the Beginning Value, and T is Time in years. Simply use the CAGR calculator provided above for instant results.

This online CAGR calculator makes crunching numbers a breeze. Just enter your Initial Investment, the Final Value of your investment, and the investment duration. The calculator serves your compound annual growth rate (CAGR) instantly.

Not really. There is a better tool known as XIRR for that.

The CAGR formula works well for solo lump-sum investments, but when the investment involves mutual fund SIPs and their earnings over various timeframes, XIRR is the better tool. While CAGR might not be able to handle multiple inflows and outflows, XIRR can combine multiple CAGRs for a comprehensive view. Perfect for handling mutual fund investments with regular SIPs or occasional ad-hoc investments.

CAGR works wonders for tracking the performance of lump-sum mutual fund investments. It unveils the average annual compound growth of your mutual fund investment. For example, investing Rs.2 lakh in a mutual fund in 2015 and cashing out Rs.2,50,000 three years later gives a CAGR of 7.72% annually. CAGR = (2,50,000 / 2,00,000) ^ (1/3) - 1 = 7.7217%.

Absolute return is the simple percentage gain. For example, Rs.10,000 invested in 2016 turning into Rs.20,000 in 2020 gives an absolute return of 100%. CAGR accounts for compounding and gives 18.92% for the same scenario. Absolute Return = (End Amount - Initial Amount) / Initial Amount * 100. CAGR = (End Value / Initial Value) ^ (1/n) - 1.

The compound annual growth rate (CAGR) is the mean annual growth rate of an investment over a predetermined time period greater than a year. It is among the most precise methods for figuring out returns for investments in inventories, products, logistics, employees, and the returns generated through them over a period of time.

There is no fixed measure for a good CAGR. However, a corporation should aim for a CAGR of 5% to 10% in sales revenue. A CAGR of 10%-20% would be beneficial for a company that has been in business for more than five years. In the IT sector, a CAGR of 20% or more is regarded as good, while in the e-commerce sector, 15% or more is considered good.