CAGR Calculator

CAGR = [(Ending Value ÷ Beginning Value)^{(1 ÷ Years)} − 1] × 100

CAGR vs. simple average annual return: CAGR tells you the single, steady annual growth rate that would take your investment from the beginning value to the ending value over the given period, smoothing out year-to-year ups and downs. A simple average of yearly returns does not do this — it can overstate actual growth because it ignores compounding and volatility. For example, an investment that gains 100% in year 1 and loses 50% in year 2 has a simple average return of (+100% − 50%) ÷ 2 = +25%, but it actually ended exactly where it started — a true CAGR of 0%. CAGR is the more reliable figure for comparing investments of different types, sizes or durations, because it expresses growth as one consistent annualized rate.

Note: CAGR is a backward-looking measure — it describes growth that has already happened between two known values. It does not predict future returns. If you want to project the future value of a lumpsum or monthly SIP investment forward using an assumed rate of return, use the Lumpsum Calculator or SIP Calculator instead.

Worked example: An investment worth ₹1,00,000 grows to ₹2,50,000 over 5 years. CAGR = (2,50,000 ÷ 1,00,000)^(1/5) − 1 = (2.5)^0.2 − 1 ≈ 0.2011, or about 20.11% per year. This means the investment effectively grew at a steady ~20.11% annual rate to reach its final value — even if the actual year-to-year returns fluctuated.