This free online CAGR calculator computes the Compound Annual Growth Rate of any investment, showing the smoothed annual growth rate between its beginning and ending value over a chosen holding period. It's a quick way to compare the performance of stocks, mutual funds, or business revenue across different time frames.
Calculates the Compound Annual Growth Rate (CAGR) of an investment based on its beginning value, ending value, and the number of years held.
How to Use the CAGR Calculator
Enter the starting value of your investment in the "Beginning Value (₹)" field.
Enter the final value of your investment in the "Ending Value (₹)" field.
Enter the number of years the investment was held in the "Number of Years" field.
Click "Calculate CAGR" to view the compound annual growth rate.
What CAGR Tells You
CAGR is the single steady yearly rate that would turn the beginning value into the ending value over the period, if growth had been compounded evenly every year. Real investments rarely grow evenly, so CAGR is a smoothed summary, not a record of what happened in any particular year.
The calculator divides the ending value by the beginning value, raises the result to the power 1 ÷ years, subtracts 1 and multiplies by 100. The number of years can be a decimal, so a holding of 2 years and 6 months can be entered as 2.5.
Worked Examples
A ₹1,00,000 lump sum in an equity fund grows to ₹2,00,000 in 5 years. CAGR = (2,00,000 ÷ 1,00,000)^(1/5) − 1 = 14.87%. The absolute return is 100%, and dividing that by 5 gives 20% a year, which overstates the yearly growth because it ignores compounding.
A stock bought for ₹1,00,000 is worth ₹1,50,000 after 2.5 years. Entering 2.5 years gives a CAGR of 17.61%.
Why averages mislead: an investment that rises 50% in year one and falls 50% in year two has a simple average return of 0%, yet ₹1,00,000 ends at ₹75,000. Its CAGR is −13.40%, which matches the actual loss.
CAGR Needed to Multiply Your Money
Period
1.5 times
Double
Triple
3 years
14.47%
25.99%
44.22%
5 years
8.45%
14.87%
24.57%
10 years
4.14%
7.18%
11.61%
A handy shortcut is the Rule of 72: divide 72 by the CAGR to estimate the years needed to double. At 8% that gives 9 years and at 12% about 6 years, both very close to the exact figures.
When CAGR Is the Wrong Measure
SIPs and other regular contributions. CAGR assumes one amount invested at the start. If money went in at different dates, the correct measure is XIRR, which accounts for the timing of each instalment. Dividing a SIP's final value by the total invested and applying CAGR understates the true return.
Withdrawals and dividends paid out. Cash taken out during the period is not in the ending value, so CAGR on the remaining balance understates performance. Add back payouts, or use XIRR.
Very short periods. Annualising a few months of returns can produce extreme numbers. A 10% gain in 3 months becomes a CAGR of about 46%, which says little about what to expect over a year.
Comparing like with like. Mutual fund factsheets in India show returns of over one year as CAGR, so this tool lets you compare your own holding with a fund or index over the same dates. Past returns do not indicate future returns.
Frequently Asked Questions
It uses the standard compound annual growth rate formula CAGR = ((Ending Value ÷ Beginning Value)^(1 ÷ Number of Years) − 1) × 100.
CAGR accounts for the effect of compounding over the entire holding period, giving a single smoothed annual growth rate, whereas a simple average of yearly returns can be misleading when returns vary significantly from year to year.
Not accurately. A SIP invests a fresh amount every month, so each instalment is held for a different length of time. CAGR treats everything as invested on day one and so understates the return. Use XIRR, which most fund platforms and the XIRR function in spreadsheets calculate from your transaction dates.
Yes, if the ending value is lower than the beginning value, the calculated CAGR will be negative, indicating that the investment lost value on average each year over the period.
Absolute return is the total percentage gain over the whole period, regardless of how long it took. CAGR converts that into a yearly rate. A 60% absolute return is excellent over 3 years (about 16.9% CAGR) but modest over 10 years (about 4.8% CAGR), which is why CAGR is better for comparing investments held for different lengths of time.