CAGR Calculator

Compute the Compound Annual Growth Rate of your investments.

How This Tool Works

Operation: The CAGR (Compound Annual Growth Rate) Calculator computes the geometric progression ratio that describes the rate of return over a specified time period, assuming the investment grows at a steady rate compounded annually. The formula is:

CAGR = (Ending Value / Beginning Value)1/n − 1

Where:

  • Ending Value — The final value of the investment at the end of the period
  • Beginning Value — The initial investment amount
  • n — The number of years the investment was held

The tool also calculates the absolute return percentage (Ending Value / Beginning Value − 1) and the absolute gain (Ending Value − Beginning Value), providing a complete picture of investment performance in a single view.

Key Benefits of Using the CAGR Calculator

  • Privacy-guaranteed calculations: Your investment values — potentially representing significant personal wealth — are processed entirely in your browser. No data is stored, logged, or transmitted, ensuring your financial figures remain confidential.
  • Instant multi-scenario analysis: Compare multiple investment periods or exit values without refreshing the page. Paste different ending values or adjust time horizons to see how the CAGR changes dynamically.
  • Complete return breakdown: The tool displays not just the CAGR percentage but also the absolute gain and simple return, giving you both annualised and total-return perspectives.

Practical Real-World Use Cases

  • Investors evaluating fund performance: An investor who put ₹1,00,000 into a mutual fund 5 years ago and now sees a value of ₹1,80,000 can compute the CAGR (approximately 12.5%) to compare against the fund's benchmark index or other fund options.
  • Business owners measuring company growth: A startup founder who grew annual revenue from ₹50 lakh to ₹1.5 crore over 3 years can calculate the CAGR (approximately 44%) to present in investor pitches as evidence of growth trajectory.
  • Retail investors comparing asset classes: Someone who invested ₹2,00,000 in gold 10 years ago (now worth ₹4,50,000) and ₹2,00,000 in fixed deposits (now worth ₹3,20,000) can compare the CAGR of both — 8.5% vs. 4.8% — to inform future allocation decisions.

Frequently Asked Questions (FAQ)

Does CAGR account for intermediate cash flows (additional investments/withdrawals)?

No — the standard CAGR formula assumes a single initial investment with no additions or withdrawals during the period. For portfolios with multiple cash flows, use XIRR instead.

Can CAGR be negative?

Yes. If the ending value is less than the beginning value, the CAGR will be negative, representing a loss. For example, an investment of ₹1,00,000 that becomes ₹85,000 over 3 years has a CAGR of approximately −5.3%.

What is the difference between CAGR and absolute return?

Absolute return shows the total gain without accounting for time. A 100% return over 10 years is only 7.2% CAGR, while 100% over 2 years is 41.4% CAGR. CAGR is a better metric for comparing investments across different time periods.