Initial Investment Value (Rs)
1,0001 Crore
Final Investment Value (Rs)
1,0005 Crore
Time Period (Years)
130
Initial Value Total Growth
What is a CAGR Calculator?
CAGR (Compound Annual Growth Rate) tells you the single, smoothed-out annual rate at which an investment grew from its starting value to its ending value over a period of time — even if the actual year-to-year growth was uneven (as it usually is with mutual funds or stocks).
CAGR is one of the most widely used metrics to compare the performance of different mutual funds, stocks, or investments, because it strips away the year-to-year noise and gives a single, comparable annual growth figure.
How CAGR is Calculated
CAGR = [ (Final Value / Initial Value)1/n − 1 ] × 100
Initial Value: The value of your investment at the start
Final Value: The value of your investment at the end
n: Number of years between the initial and final values
Note: CAGR assumes smooth, uniform growth every year. It does not reflect actual volatility — an investment could have had a very rocky path (sharp falls and rises) and still show a smooth CAGR, since CAGR only looks at the start and end points.
Example: An investment that grew from Rs. 1,00,000 to Rs. 2,50,000 over 5 years has a CAGR of approximately 20.11% per annum, even though the actual year-by-year returns may have varied significantly.
Frequently Asked Questions
What is CAGR?
CAGR (Compound Annual Growth Rate) measures the mean annual growth rate of an investment over a specified period, assuming profits are reinvested each year, smoothing year-to-year volatility into a single average rate.
How is CAGR calculated?
CAGR = (Ending Value / Beginning Value)^(1/n) - 1, where n is the number of years the investment was held.
How is CAGR different from absolute return?
Absolute return shows the total percentage gain over the entire period regardless of how long it took, while CAGR expresses that same gain as an annualized rate, making it easier to compare investments held for different lengths of time.
Is CAGR the same as the actual year-by-year return?
No. CAGR is a smoothed average; actual annual returns can be higher or lower than the CAGR figure in any single year, even though overall growth matches over the full period.
Is the CAGR calculator result predictive of future returns?
No, CAGR only measures past growth between two points and does not guarantee similar growth going forward.