CAGR Calculator

Calculate the compound annual growth rate of your investments and understand how your money grew over time

📊CAGR Calculator
₹1K₹10L
₹1K₹1Cr
1 Year50 Years
📈CAGR Results
14.87%
Annual Growth
Principal: ₹1.0L
Growth: ₹1.0L
14.87%
Compound Annual Growth Rate
Total Growth₹1.0L
Total Return100.00%
Investment Period5 Years

Investment Summary

Initial Investment: ₹1.0L
Final Value: ₹2.0L
Growth: ₹1.0L (100.00%)
Annual Growth Rate: 14.87%
📚What is CAGR?

CAGR (Compound Annual Growth Rate) is the rate at which an investment grows annually over a specific period, assuming the profits are reinvested at the end of each year. It represents the smoothed annual growth rate that would result in the same total return over the investment period.

Why CAGR Matters

  • Standardized Comparison: Compare investments with different time periods
  • Smoothed Returns: Eliminates volatility to show average annual performance
  • Future Projections: Helps estimate future investment values
  • Performance Benchmark: Measure against market indices and other investments

CAGR Formula

CAGR = [(Final Value / Initial Investment) ^ (1 / Years)] - 1
FV = Final Value | IV = Initial Investment | t = Time Period

Example Calculation

Investment: ₹1,00,000 grows to ₹2,00,000 in 5 years

CAGR Calculation: [(2,00,000 / 1,00,000) ^ (1/5)] - 1

CAGR: [2 ^ 0.2] - 1 = 1.1487 - 1 = 0.1487

Result: 14.87% annual growth rate

🧮CAGR Formula Explained

CAGR Formula

CAGR = [(FV / IV) ^ (1 / t)] - 1
FV
Final Value
IV
Initial Investment
t
Time Period (Years)

Step-by-Step Calculation

1
Calculate Growth Ratio
Divide Final Value by Initial Investment
Growth Ratio = Final Value ÷ Initial Investment
2
Apply Time Factor
Raise the growth ratio to the power of (1/years)
Annual Factor = Growth Ratio ^ (1 ÷ Years)
3
Calculate CAGR
Subtract 1 and multiply by 100 for percentage
CAGR = (Annual Factor - 1) × 100

Practical Example

Scenario: Investment of ₹5,00,000 grows to ₹8,00,000 in 3 years
Step 1: Growth Ratio = 8,00,000 ÷ 5,00,000 = 1.6
Step 2: Annual Factor = 1.6 ^ (1÷3) = 1.6 ^ 0.333 = 1.1696
Step 3: CAGR = (1.1696 - 1) × 100 = 16.96%
Result: The investment grew at an annual rate of 16.96%
❓Frequently Asked Questions