CAGR Calculator

Compound Annual Growth Rate (CAGR) Calculator

The Compound Annual Growth Rate (CAGR) helps you understand how your investment grows annually over a specific period. It’s a useful measure for comparing returns across investments.

Initial Investment Value (₹)

Final Investment Value (₹)

Investment Period (Years)

Enter values to calculate CAGR

What is CAGR?

CAGR (Compound Annual Growth Rate) is a financial metric that represents the mean annual growth rate of an investment over a specified period longer than one year. It provides a smoothed annual rate of return, eliminating the effects of volatility and providing a clearer picture of investment performance.

CAGR Formula:

CAGR = (Ending Value / Beginning Value)^(1 / Number of Years) - 1

Example: If you invested ₹50,000 in a mutual fund, and after 5 years it's worth ₹75,000, the CAGR would be:

CAGR = (75,000 / 50,000)^(1/5) - 1 = 0.08447 or 8.45%

How to Interpret CAGR Results

CAGR Range	Interpretation	Typical Investments
0% - 5%	Low growth, conservative	Fixed deposits, debt funds
5% - 10%	Moderate growth	Balanced funds, some equity funds
10% - 15%	Good growth	Quality equity funds, stocks
15%+	High growth	Aggressive equity funds, high-growth stocks

Note: These are general guidelines. Always consider risk, investment horizon, and your financial goals when evaluating investments.

Limitations of CAGR

Doesn't Reflect Volatility: CAGR smooths out returns, hiding the actual year-to-year volatility
Assumes Reinvestment: It assumes all returns are reinvested, which may not always be the case
Ignores Cash Flows: CAGR doesn't account for additional investments or withdrawals during the period
Past Performance: Like all historical metrics, it doesn't guarantee future returns

Warning: Don't rely solely on CAGR for investment decisions. Always consider other factors like risk, economic conditions, and your investment goals.