CAGR Calculator
Find the compound annual growth rate between two values, or the end value from a CAGR.
CAGR
Year-wise value at this CAGR
| Year | Value | Growth so far |
|---|---|---|
| 1 | ₹1,14,870 | 14.87% |
| 2 | ₹1,31,951 | 31.95% |
| 3 | ₹1,51,572 | 51.57% |
| 4 | ₹1,74,110 | 74.11% |
| 5 | ₹2,00,000 | 100% |
Real investments rarely grow evenly; this shows the smooth path that CAGR describes.
How it works
To find the CAGR from a start value, an end value and the time in years:
CAGR = (End value ÷ Start value)1 ÷ years − 1
To find the end value from a CAGR (reverse mode):
End value = Start value × (1 + CAGR)years
- CAGR is used as a decimal in the formula (12% = 0.12) and shown as a percentage.
- Years can include a part year, such as 2.5.
- Absolute gain = End value − Start value. Total growth = (End value ÷ Start value − 1) × 100%.
Worked example
Finding CAGR: an investment of ₹1,00,000 grows to ₹2,00,000 in5 years.
- End ÷ Start = ₹2,00,000 ÷ ₹1,00,000 = 2
- Raise to the power 1 ÷ 5 = 0.2: 20.2 = 1.148698
- CAGR = 1.148698 − 1 = 0.148698 = 14.87% a year
Reverse: ₹1,00,000 growing at 12% CAGR for 10 years.
- (1 + 0.12)10 = 3.105848
- End value = ₹1,00,000 × 3.105848 = ₹3,10,584.82
Frequently asked questions
What is CAGR?
CAGR (compound annual growth rate) is the single yearly rate at which a value would have to grow, with growth compounding every year, to go from its start value to its end value over a given time. It turns an uneven journey into one smooth yearly rate, which makes different investments or periods easy to compare.
How is CAGR different from absolute return?
Absolute return is the total growth over the whole period, ignoring time. ₹1,00,000 growing to ₹2,00,000 is a 100% absolute return whether it took 2 years or 10. CAGR spreads that growth over the years: over 5 years it is 14.87% a year.
Why is CAGR different from the average yearly return?
A simple average ignores compounding. If ₹100 rises 50% in year 1 (to ₹150) and falls 50% in year 2 (to ₹75), the average return is 0%, but you have lost money. The CAGR is -13.4% a year, which matches what actually happened.
Can CAGR be negative?
Yes. If the end value is lower than the start value, CAGR is negative and shows the steady yearly rate of loss.
Can I use CAGR for a SIP or regular investments?
Not directly. CAGR assumes one amount at the start and one value at the end. With money added or taken out along the way, as in a SIP, the timing of each payment matters, so a measure such as XIRR is more suitable. Use the SIP calculator to project a regular investment.
Does a CAGR of 12% mean the investment grew 12% every year?
No. Actual yearly returns can go up and down a lot; CAGR is the smoothed rate that gives the same start and end values. Past CAGR also does not tell you what future returns will be.
Can I enter part of a year?
Yes. Enter the time in years with decimals, for example 2.5 for two and a half years or 0.75 for nine months. The formula works the same way with a fractional number of years.