CAGR Calculator – Understand Compound Annual Growth Rate Easily

The CAGR Calculator is an essential tool for investors and business owners to determine the Compound Annual Growth Rate (CAGR) of investments over a specific period. CAGR gives a smooth, average annual growth rate assuming profits are reinvested, making it a reliable metric compared to simple returns.

What is CAGR and Why is it Important?

CAGR stands for Compound Annual Growth Rate, representing the constant rate at which an investment grows yearly over a period, accounting for the effect of compounding. It helps in comparing different investments or tracking growth when returns fluctuate.

How Does the CAGR Calculator Work?

Initial Investment Value: The starting amount you invested.
Final Investment Value: The value of the investment at the end of the period.
Investment Duration (Years): The total number of years the investment was held.

By inputting these three values, the calculator instantly computes the CAGR, showing the average yearly growth rate.

CAGR Formula

The CAGR formula used in this calculator is:

CAGR = (Final Value / Initial Value)^{1 / n} – 1

Where:

Initial Value (PV): Starting value of the investment
Final Value (FV): Value at the end of the investment period
n: Number of years

Benefits of Using a CAGR Calculator

Accurate Growth Analysis: Understand the true annual growth rate, smoothing out yearly fluctuations.
Investment Comparison: Compare performance of stocks, mutual funds, or business revenues effectively.
Time-Saving: Quickly calculate without manual math or complex spreadsheets.
Financial Planning: Project future growth and set realistic investment goals.

Example of CAGR Calculation

Initial Value	Final Value	Duration	Calculated CAGR
₹1,00,000	₹10,00,000	5 Years	58.49%

Use this compound annual growth rate calculator to analyze mutual fund returns, stock performance, or business growth over multiple years.

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❓ Frequently Asked Questions (FAQs) About CAGR

What is a CAGR Calculator? ▼

A CAGR Calculator is an online tool that calculates the compound annual growth rate of an investment, providing the average yearly return assuming reinvested profits.

How is CAGR different from absolute return? ▼

Absolute return shows total growth, while CAGR incorporates the time period to show the consistent annual growth rate.

What inputs are required for CAGR calculation? ▼

You need the initial investment amount, final value, and the number of years held.

Can CAGR be used for business revenue growth? ▼

Yes, CAGR is widely used to measure business growth over time, especially revenue and profit increases.

Is CAGR accurate for volatile investments? ▼

CAGR smooths out volatility by averaging returns but doesn’t reflect year-to-year fluctuations or risks.

Can I use this calculator for SIPs or mutual funds? ▼

Yes, CAGR works well for lump-sum investments. For SIPs, use a dedicated SIP calculator to factor in regular investments.

CAGR Calculator

Learn Everything About CAGR: Explore the CAGR Meaning, Master the CAGR Formula, and Use Our Online CAGR Calculator and SIP CAGR Calculator to Accurately Calculate Your Compound Annual Growth Rate.