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CAGR Calculator
Calculate Compound Annual Growth Rate for an investment over a fixed period
CAGR represents the year-over-year growth rate of an investment over a specified time period.
Unlike simple average returns, CAGR provides a smoothed rate that accounts for the compounding effect over time.
Results
Your investment growth analysis
Compound Annual Growth Rate (CAGR) Calculator
Measure the annual growth rate of an investment over a specified time period.
Purpose
CAGR helps you understand the smoothed annual growth rate of an investment over time. It's particularly useful for comparing investments with different time horizons or evaluating the performance of a portfolio over multiple years.
Formula
The formula calculates the geometric progression ratio that provides a constant rate of return over the time period.
Example
If you invested ₹10,000 and it grew to ₹16,000 over 5 years, the CAGR would be 9.86%, meaning your investment grew at an average rate of 9.86% per year.
Use Cases
- Comparing returns on different investments over varying time periods
- Evaluating the historical performance of a portfolio
- Setting realistic growth expectations for long-term investments
- Assessing the performance of different asset classes
- Analyzing investment performance against benchmarks or inflation
Additional Information
CAGR differs from average annual return because it accounts for compounding. For example, if an investment grows 100% in year 1 and loses 50% in year 2, the average return is +25%, but the CAGR is 0% since you're back where you started.