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CAGR Calculator

Calculate the annualised compounded rate of return between two points in time.

₹

Value at the beginning of the period

₹

Value at the end of the period

Years

Number of years between start and end

How CAGR Works

CAGR smooths out intermediate fluctuations to provide a single annual rate that would have grown the initial value to the final value.

Results

Compound Annual Growth Rate
20.11%
Initial Investment₹1,00,000
Final Value₹2,50,000
Absolute Gain₹1,50,000
Total Absolute Return150.0%
Growth Multiple2.50x

For information only. Not financial advice. Results are estimates.

How this calculator works

The Compound Annual Growth Rate (CAGR) is computed by taking the nth root of total return over n years:

CAGR = (FV / PV)^(1 / n) − 1

  • FV — Final value of the investment
  • PV — Initial present value of the investment
  • n — Number of years

Worked Example

Suppose you invested ₹1,00,000 and after 5 years your portfolio reached ₹2,50,000:

CAGR = (2,50,000 / 1,00,000)^(1 / 5) − 1 = (2.5)^(0.2) − 1 ≈ 0.2011 (20.11%)

Total absolute gain is ₹1,50,000 (+150.0%), representing a 2.50x growth multiple over the 5-year investment duration.

Measuring monthly SIPs or multiple cash flows? CAGR only works for one-time lump-sum investments. To understand why SIP returns require a different formula, read our guide on CAGR vs. XIRR or use the XIRR Calculator.

Frequently asked questions

What is CAGR and when should I use it?
CAGR is ideal when evaluating mutual funds, stocks, real estate, or business revenues over multiple years. Because returns vary from year to year, CAGR provides the geometric mean rate of return.
What are the limitations of CAGR?
CAGR assumes a smooth annual rate and ignores volatility and drawdowns during intermediate years. Two investments with identical CAGRs could have experienced wildly different levels of risk.
Can CAGR be negative?
Yes. If an investment declines in value (e.g. ₹1,00,000 drops to ₹80,000 over 3 years), the CAGR formula yields a negative annual rate (-7.17%), accurately reflecting the annualized capital loss.

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CAGR

20.11%