CAGR Calculator

CAGR is the constant annual rate that would take a starting value to an ending value over a period. Enter both values and the number of years to see the rate, and what it does and does not tell you.

Initial value

₹

Final value

₹

Period (years)

Enter part years as a decimal: 18 months is 1.5.

CAGR

20.11%

Total change

150%

Total gain

₹1,50,000

Multiple

2.50x

Growing ₹1,00,000 to ₹2,50,000 over 5 years takes 20.11% a year, every year. The real investment almost certainly did not grow that smoothly - CAGR hides the path.

What that rate looks like year by year

What that rate looks like year by year
Year	Value at this rate
1	₹1,20,112
2	₹1,44,270
3	₹1,73,286
4	₹2,08,138
5	₹2,50,000

CAGR

20.11%

150% in total

What it is:: A calculator for the compound annual growth rate between two values.
What it calculates:: The annual rate, the total change over the whole period, and the smoothed year-by-year path.

Assumptions

Nothing was invested or withdrawn between the two dates.
The period is measured in years; a part year is entered as a decimal.
Taxes, costs and inflation are not deducted.

How it works

CAGR smooths an investment's actual path into a single annual rate. It is the rate that, applied every year without variation, gets you from the start value to the end value.

That smoothing is the point and also the limitation. Two investments with the same CAGR can have had wildly different journeys, and the one that fell 40% in the middle was a very different thing to hold.

CAGR ignores money added or taken out along the way. If you invested more during the period, CAGR will not describe your return - XIRR will. Use this for a single amount that went in once and came out once.

The calculator projects the smooth path year by year so you can see what the rate implies, and it lands exactly on the value you entered rather than drifting from a rounded rate.

A starting value of zero has no growth rate, and a period of zero years has none either. The calculator says so instead of producing infinity.

Formula

CAGR = ((Final / Initial)^(1 / t) - 1) x 100

Final: = value at the end of the period
Initial: = value at the start
t: = period in years

A negative result is a real answer, not an error: it is the annual rate at which the value shrank.

Example calculation

₹1,00,000 growing to ₹2,50,000

Total change: 150%
CAGR if it took 5 years: 20.11%
CAGR if it took 10 years: 9.6%
CAGR of a fall from ₹1,00,000 to ₹80,000 over 4 years: -5.43%

Frequently asked questions

What is the difference between CAGR and absolute return?

Absolute return is the total change: ₹1,00,000 becoming ₹2,00,000 is 100%. CAGR annualises it: over five years that same doubling is 14.87% a year. Absolute return says how much; CAGR says how fast, and only CAGR lets you compare investments held for different lengths of time.

When is CAGR the wrong measure?

When money went in or out during the period. A SIP has twelve entry points a year, so its return is an XIRR calculation, not a CAGR. CAGR also hides volatility completely, so it flatters an investment that had a terrifying middle.

Can CAGR be negative?

Yes, and this calculator returns it rather than refusing. A value that fell from ₹1,00,000 to ₹80,000 over four years has a CAGR of about -5.4%: the constant annual rate of decline.

Why does the calculator refuse a starting value of zero?

Because there is no rate that grows zero into anything. Dividing by zero gives infinity rather than an answer, so the calculator says the starting value must be more than zero instead of showing a meaningless number.

Is a high CAGR always better?

Not on its own. A high CAGR over two years may be a lucky window; the same investment over ten years may look very different. Check the period, check whether the start date was a market low, and check what the path looked like before treating the number as a track record.