CAGR Calculator

What is CAGR?

CAGR (Compound Annual Growth Rate) is the average yearly rate at which an investment grows over a period of time, assuming steady compounding. It's widely used to compare the performance of mutual funds, stocks, and other investments over different time periods.

Disclaimer : Enter numbers in your local currency — the calculation works the same regardless of currency.

Formula

CAGR = [(Final Value ÷ Initial Value) ^ (1 ÷ Years)] − 1

Example

If Initial Value = 1,00,000, Final Value = 2,00,000, and Time Period = 5 years:

CAGR = 14.87%

This means the investment grew at an average steady rate of 14.87% per year to double in value over 5 years — even if the actual year-to-year growth was uneven.

How CAGR Connects to Your Other Calculators

CAGR is often the number you calculate after the fact, to judge how well an investment actually performed — which makes it useful alongside the calculators you'd use to plan investments in the first place.

  • SIP Calculator — while SIP projects future value using an assumed annual return, CAGR tells you the real, actual annual growth rate your SIP investment achieved once you know the numbers.
  • FD / RD Calculator — comparing a fixed deposit's guaranteed rate against a market investment's CAGR helps you judge whether the extra risk of market investing paid off.
  • PPF Calculator — PPF offers a fixed, government-set rate, making it a useful low-risk benchmark to compare against a market investment's CAGR.
  • Retirement Calculator — knowing your portfolio's actual historical CAGR gives you a more realistic growth rate to plug into long-term retirement projections, instead of guessing.

In short: CAGR looks backward to measure real performance, while calculators like SIP and Retirement look forward to project it — using both together gives you a much more grounded financial picture.

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Frequently Asked Questions

CAGR, or Compound Annual Growth Rate, is the average yearly growth rate of an investment over a period of time, assuming the growth was steady and compounded every year. It smooths out year-to-year volatility into a single, easy-to-compare percentage.

CAGR is calculated by dividing the final value of an investment by its initial value, raising that result to the power of 1 divided by the number of years, then subtracting 1. For example, an investment growing from $100,000 to $200,000 over 5 years has a CAGR of about 14.87%.

A simple average annual return adds up each year's return and divides by the number of years, which can be misleading with volatile investments. CAGR accounts for compounding, giving a more accurate picture of an investment's actual growth trajectory over time.

Generally yes, but CAGR alone doesn't show the risk or volatility involved in achieving that return. Two investments can have the same CAGR while one experienced wild swings and the other grew steadily, so CAGR is best used alongside a risk assessment, not in isolation.

Yes. If an investment's final value is lower than its initial value, the CAGR will be negative, reflecting an average annual decline over the period measured.

For long-term equity investments, a CAGR in the 10-15% range is often considered strong, based on historical broad market averages, though this varies by market, asset class, and time period. Compare a fund's CAGR to a relevant benchmark index over the same period for better context.