CAGR Calculator

CAGR, the compound annual growth rate, tells you the steady yearly rate at which an investment would have grown to go from its starting value to its ending value. It is the standard way to compare returns from mutual funds, stocks, property, gold or a business's revenue over different time periods. This calculator works out CAGR from three inputs.

How to use this calculator

1. Enter the starting value, the amount invested or the value at the beginning.
2. Enter the ending value, the current or final value.
3. Enter the number of years between the two values. Fractions of a year are allowed.
4. Read the CAGR and the absolute return for comparison.

Formula

CAGR = (End / Start)^(1 / years) − 1

• End = ending value
• Start = starting value
• years = length of the period in years

Multiply the result by 100 to express it as a percentage.

For comparison, absolute return = (End − Start) ÷ Start × 100.

Worked example

You invested ₹2 lakh in a mutual fund, and 7 years later it is worth ₹5 lakh.

• End / Start = 5,00,000 ÷ 2,00,000 = 2.5
• 2.5^(1/7) ≈ 1.1399
• CAGR = 1.1399 − 1 ≈ 13.99%, or about 14.0% a year

The simple average overstates the return because it ignores compounding. CAGR is the rate that, compounded each year, turns ₹2 lakh into ₹5 lakh in seven years. Check: 2,00,000 × 1.1399^7 ≈ ₹5,00,000.

Things to keep in mind

• One cash flow in, one out. CAGR assumes a single investment at the start and no additions or withdrawals. For SIPs, top-ups or partial withdrawals, use XIRR, which accounts for the date of every cash flow.
• Smoothed returns. CAGR hides volatility. A fund that rose 40%, fell 30% and then rose 20% has a CAGR of about 5.5% over three years, but the ride was far rougher than that number suggests.
• Period matters. CAGR depends heavily on the start and end dates. Returns measured from a market low look better than those measured from a peak. Rolling returns over many periods give a fuller picture.
• Before tax and inflation. The calculator uses the values you enter. To see real growth, compare CAGR with inflation over the same period. Taxes such as capital gains tax reduce what you actually keep.
• Fund factsheets. Indian mutual fund factsheets report returns for periods over one year as CAGR, so this calculator lets you check or compare those figures yourself.
• Not a forecast. A past CAGR does not predict future returns. To project growth at an assumed rate, use the lumpsum calculator.

This calculator is for education and comparison. It is not investment advice.