CAGR Calculator
Compound annual growth rate between two values.
Inputs
This calculator is for general information only and isn't financial advice. Rates, tax rules, and your actual eligibility depend on your specific situation — check with your bank or a qualified advisor before acting on it.
Formula
CAGR = (Ending / Beginning)^(1 / Years) − 1
CAGR is the constant annual rate that would take the beginning value to the ending value over n years, assuming gains were reinvested. It smooths out volatile year-to-year returns into a single comparable percentage.
Worked example
An investment growing from ₹1,00,000 to ₹2,00,000 over 5 years has a CAGR of about 14.87% — the steady rate that doubles your money in that period. Simple ROI would show 100% total return, but CAGR accounts for the five-year duration.
Where this can give the wrong answer
- CAGR can be misleading when the beginning or ending value is a spike — one lucky year inflates CAGR even if most years were flat.
- Beginning and ending values must both be positive — CAGR with a negative starting value or a loss to near-zero isn't meaningful in this calculator.
- Fractional years (e.g. 2.5) are allowed, useful for IPO lock-in periods or partial holding periods, but assume a smooth growth path that real markets don't follow.
FAQ
- Use CAGR when comparing total growth over a period — it's the geometric mean. Arithmetic average of yearly returns overstates performance when returns vary, which is why mutual fund fact sheets quote CAGR for multi-year periods.