CAGR Calculator
Calculate Compound Annual Growth Rate.
CAGR Calculator
A CAGR calculator shows the annualized growth rate of an investment over a period, smoothing out year-to-year volatility. It is one of the most practical ways to compare different assets on a common annual basis. Investors in India and global markets use CAGR to evaluate stocks, mutual funds, businesses, and portfolios.
Why CAGR is useful
Absolute return can be misleading when investment periods differ. CAGR converts total growth into an equivalent yearly rate, making comparisons fair and intuitive. It assumes steady compounding, so it is best used as a summary metric rather than a year-by-year performance description.
CAGR formula
Best practices
- Use exact investment period in years for accuracy.
- Compare CAGR along with volatility and drawdowns.
- Do not treat CAGR as guaranteed future return.
- Use post-fee and post-tax numbers where possible.
How to use this CAGR calculator
- Enter initial investment value.
- Enter final investment value.
- Enter total holding period in years.
- Check annualized growth rate output.
- Use it to benchmark against alternatives.
Worked example
If an investment grows from Rs 3,00,000 to Rs 6,00,000 in 6 years, CAGR = (600000/300000)^(1/6) - 1 = 12.25% approximately.