CAGR Calculator
Calculate Compound Annual Growth Rate (CAGR) for Stocks, Mutual Funds & Long-Term Investments
| Invested Amount | ₹1,00,000 |
| Total Returns | ₹1,50,000 |
| Final Value | ₹2,50,000 |
CAGR
20.11%
CAGR
20.11%
₹1,00,000
₹1,50,000
What is CAGR (Compound Annual Growth Rate)?
CAGR stands for Compound Annual Growth Rate. It is a financial metric used to measure the average yearly growth of an investment over a specific time period. CAGR assumes that the investment grows at a constant rate every year.
Investors commonly use CAGR to evaluate the performance of stocks, mutual funds, portfolios, and even business revenues. It provides a clearer long-term picture compared to simple returns.
Why Use a CAGR Calculator?
Manually calculating CAGR can be confusing, especially for long-term investments. A CAGR calculator simplifies this process and provides instant, accurate results.
- Easy comparison of multiple investments
- Clear understanding of annualized growth
- Removes the impact of market volatility
- Ideal for long-term financial planning
CAGR Formula
- Initial Value: Starting investment amount
- Final Value: Investment value at maturity
- Years: Total duration of investment
How to Calculate CAGR Step-by-Step
- Divide final value by initial value
- Raise the result to the power of (1 ÷ number of years)
- Subtract 1 from the result
- Multiply by 100 to get percentage
CAGR Calculation Example
Initial Investment: ₹1,00,000
Final Value: ₹2,00,000
Investment Period: 5 Years
CAGR = (2,00,000 / 1,00,000)1/5 − 1 = 14.87%
CAGR vs Simple Return
| Criteria | CAGR | Simple Return |
|---|---|---|
| Time Factor | Included | Ignored |
| Accuracy | High (long-term) | Low |
| Volatility | Smoothed | Not smoothed |
Where is CAGR Used?
- Stock market performance analysis
- Mutual fund and SIP evaluation
- Business revenue growth tracking
- Portfolio comparison
- Long-term financial planning
Limitations of CAGR
- Does not reflect yearly ups and downs
- Assumes constant growth rate
- Not suitable for short-term investments
- Ignores additional cash flows
What is a Good CAGR in India?
- 8% – 10%: Average, beats inflation
- 12% – 15%: Good long-term equity returns
- 18%+: High growth with higher risk
Final Thoughts
CAGR is one of the most reliable metrics for evaluating long-term investment performance. It helps investors make informed decisions by presenting a realistic annual growth rate.
Use our free CAGR Calculator to plan your investments confidently and compare returns with clarity.