CAGR Calculator
Calculate the Compound Annual Growth Rate (CAGR) of your investments to understand your true annual returns over time.
Compound Annual Growth Rate
Total Profit
Growth Multiple
Did you know?
A CAGR of 20.11% means your money doubles every 4 years (Rule of 72).
Investment Growth Visualization
Yearly Growth Table
| Year | Investment Value | Total Gains |
|---|---|---|
| 0 | ₹1,00,000 | +₹0 |
| 1 | ₹1,20,112 | +₹20,112 |
| 2 | ₹1,44,270 | +₹44,270 |
| 3 | ₹1,73,286 | +₹73,286 |
| 4 | ₹2,08,138 | +₹1,08,138 |
| 5 | ₹2,50,000 | +₹1,50,000 |
What is CAGR and How to Use It?
The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer than one year. It represents one of the most accurate ways to calculate and determine returns for individual assets, investment portfolios, and anything that can rise or fall in value over time.
The CAGR Formula
Where:
Final Value = The value of the investment at the end of the period
Initial Value = The value of the investment at the beginning of the period
n = Number of years
Why use CAGR instead of Absolute Returns?
Absolute returns only show you the total percentage gain or loss. For example, if your ₹1 Lakh grows to ₹2 Lakh in 5 years, your absolute return is 100%. However, if the same growth takes 10 years, the absolute return is still 100%, but the investment was much less efficient. CAGR accounts for this time factor, giving you an annualized rate (approx 14.87% for 5 years vs 7.18% for 10 years).
Advantages
- • Smooths out volatile returns over time.
- • Easy comparison between different asset classes.
- • Helps in setting realistic future expectations.
Limitations
- • Ignores volatility and market risks.
- • Assumes steady growth (which rarely happens).
- • Can be misleading for short-term investments.