CAGR Calculator

Calculate compound annual growth rate of any investment

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Built by WOWHOW Team · 14+ yrs engineering

CAGR Calculator is a free, browser-based tool that lets you calculate compound annual growth rate of any investment — with zero signup, zero installation. Your data never leaves your browser. Part of 138+ free developer and business tools at wowhow.cloud, built and maintained by a team with 14+ years of hands-on development experience.

TOOLCAGR Calculator

Initial ValueRs 1.00 L

Rs ₹1,000Rs 1.00 Cr

Final ValueRs 2.00 L

Rs ₹1,000Rs 10.00 Cr

Time Period (Years)5 yrs

1 yrs30 yrs

Formula

CAGR = (FV / IV)^(1/n) - 1

IV = Initial Value, FV = Final Value, n = Years

Compound Annual Growth Rate

14.87%

per year

Initial Value

₹1,00,000

Final Value

₹2,00,000

Absolute Return

100.0%

Growth Multiple

2.00x

Total Profit

₹1,00,000

Over 5 years

100.0% total

Year-wise Growth

1.00 L

1.15 L

1.32 L

1.52 L

1.74 L

2.00 L

Invested Amount

Growth

CAGR vs Absolute Return

CAGR

14.87%

annualized rate

Absolute Return

100.0%

total over 5 yrs

Growth Multiple

2.00x

money multiplied

What is CAGR?

CAGR (Compound Annual Growth Rate) measures the average annual growth rate of an investment over a specified period longer than one year. It smooths out year-to-year volatility and gives you a single annualized return figure that represents what your investment would have earned if it grew at a steady rate every year. CAGR is widely used to compare the historical performance of stocks, mutual funds, portfolios, and business revenue.

CAGR vs Absolute Returns

●Absolute return shows total percentage gain from start to end, ignoring time.
●CAGR normalizes this to a per-year rate, making it comparable across different time periods.
●A 100% absolute return over 5 years = 14.87% CAGR. Over 10 years = 7.18% CAGR.

When to Use CAGR

●Comparing mutual fund performance across different holding periods
●Evaluating business revenue or profit growth over multiple years
●Setting realistic investment targets with reverse CAGR calculation
●Comparing stock market index returns (Nifty 50, Sensex) over time

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About CAGR Calculator

CAGR — Compound Annual Growth Rate — is the single most important return metric for evaluating investments over multi-year periods. Unlike simple average returns, CAGR accounts for compounding and gives the annualized growth rate that would turn your starting value into your ending value. It is the standard metric used in mutual fund fact sheets, startup pitch decks, and equity research reports.

How It Works

The CAGR formula is: CAGR = (Ending Value / Beginning Value)^(1/n) - 1, where n is the number of years. This formula solves for the constant annual growth rate r such that Beginning Value × (1 + r)^n = Ending Value. For example, Rs 2 lakh growing to Rs 5 lakh in 8 years gives CAGR = (5/2)^(1/8) - 1 = 12.09%.

The reverse CAGR mode solves for the target final value: Final Value = Initial Value × (1 + CAGR)^n. This is used for goal-setting — "At 12% CAGR, what will Rs 5 lakh become in 10 years?" (Answer: Rs 15.53 lakh).

The year-wise breakdown shows the value at each annual checkpoint, revealing non-linear compounding growth. The calculator also computes absolute return (% change from start to end) and the growth multiple (Final/Initial), which are commonly used alongside CAGR in portfolio reporting. XIRR — which accounts for irregular cash flows — is the appropriate metric for SIP investments; use CAGR only for lump-sum single-point investments.

Who Is This For

An investor comparing two mutual funds — Fund A returned 180% absolute over 7 years; Fund B returned 120% over 5 years — uses CAGR to compare: Fund A = 15.5% CAGR, Fund B = 17.1% CAGR. Fund B wins on an annualized basis.

A startup founder reporting to investors calculates revenue CAGR: Rs 40 lakh in FY22 to Rs 1.8 crore in FY26 (4 years) = 45.7% CAGR — a compelling growth story for the pitch deck.

A real estate investor tracks property value from Rs 45 lakh (2015) to Rs 1.1 crore (2025, 10 years) = CAGR of 9.35% — compares against Nifty 50 CAGR of ~12% for the same period.

A parent planning college funding calculates the CAGR needed: current corpus Rs 8 lakh must grow to Rs 35 lakh in 12 years — requires 12.6% CAGR, achievable via equity mutual funds.

A finance student verifies textbook examples — checking that a bond priced at $950 maturing to $1,000 in 3 years has a CAGR of 1.73%, consistent with the yield-to-maturity concept.

Scope note: CAGR masks volatility — two investments with the same CAGR can have vastly different risk profiles. A fund that went up 50%, down 40%, up 70%, down 20% over 4 years may show the same CAGR as a stable 10% annual compounder, but with far higher drawdowns. CAGR also assumes a single lump-sum investment; for SIPs or systematic investments with multiple cash flows, use XIRR instead. CAGR does not account for taxes or expense ratios, which can reduce effective returns by 1-3% annually.

Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Results are estimates based on publicly available tax slabs and formulas. Consult a qualified Chartered Accountant, tax professional, or financial advisor for guidance specific to your situation. Built and maintained by the WOWHOW Team with 14+ years of software development experience.

How to Use

Enter the initial investment value and final value

Set the time period in years to calculate CAGR

Switch to Reverse CAGR mode to find required final value for a target growth rate

View year-wise growth breakdown and compare CAGR vs absolute returns

Frequently Asked Questions

CAGR (Compound Annual Growth Rate) is the average annual growth rate of an investment over a specified period. It smooths out volatility and gives a single annualized return figure, making it easy to compare different investments.

CAGR = (Final Value / Initial Value)^(1/n) - 1, where n is the number of years. For example, an investment growing from Rs 1 lakh to Rs 2 lakh in 5 years has a CAGR of 14.87%.

Absolute return is the total percentage gain from start to end, regardless of time. CAGR normalizes this to a per-year rate. A 100% absolute return over 5 years equals 14.87% CAGR, but over 10 years it is only 7.18% CAGR.

For Indian equity markets, a CAGR of 12-15% is considered good over long periods (10+ years). Nifty 50 has delivered approximately 12% CAGR over the last 20 years. FDs typically offer 6-7% CAGR.

Reverse CAGR calculates the required final value given an initial investment, target CAGR, and time period. It helps set realistic investment goals — for example, finding how much Rs 1 lakh will grow to at 15% CAGR over 10 years.

Yes. A negative CAGR means the investment lost value on average each year. For example, if Rs 1 lakh falls to Rs 60,000 over 5 years, CAGR = (0.6)^(1/5) - 1 = -9.6% per year. Negative CAGR is common for individual stocks or sector funds during prolonged downturns.

Simple average ignores compounding effects of losses. If an investment gains 50% in year 1 and loses 50% in year 2, the simple average is 0% — but the actual CAGR is -13.4% because you end up with Rs 75 from Rs 100 (100 × 1.5 × 0.5). CAGR correctly captures this wealth erosion.

Mutual fund fact sheets report 1-year, 3-year, 5-year, and since-inception CAGR (called "point-to-point returns"). When comparing funds, use the same time period CAGR. A fund with 18% 3-year CAGR and 12% 5-year CAGR had a strong recent 3 years — check if the 5-year CAGR of the benchmark (e.g., Nifty 50: ~12%) was beaten.