CAGR Calculator
CAGR
14.87%
Absolute Return
100.00%
Total Gain
5,000
Formula
CAGR = (10,000 / 5,000)^(1/5) − 1 = 14.87%
Year
Value
Gain from Start
1
5,743
+743
2
6,598
+1,598
3
7,579
+2,579
4
8,706
+3,706
5
10,000
+5,000
About
The CAGR Calculator computes the Compound Annual Growth Rate — the steady annual rate at which an investment would have grown from its initial value to its final value over a given number of years. CAGR smooths out volatility and gives a single comparable growth figure for investments, portfolios, or business metrics. The reverse CAGR mode lets you enter an expected CAGR and starting value to project where your investment will be at any future date.
How to use
- 1 To find CAGR: enter the initial value, final value, and number of years.
- 2 The CAGR result shows the equivalent steady annual growth rate.
- 3 To project a future value: switch to Reverse CAGR mode, enter starting value, expected CAGR, and years.
- 4 The year-by-year table shows the value at the end of each year.
- What is CAGR and why is it useful?
- CAGR (Compound Annual Growth Rate) is the single constant annual growth rate that would take an investment from its starting value to its ending value over a given period. It is useful because real investments grow unevenly year to year — CAGR smooths out that volatility into one comparable number. For example, if a fund grew from ₹1 lakh to ₹2.5 lakh in 8 years, its CAGR is about 12.1%.
- What is the CAGR formula?
- CAGR = (Final Value ÷ Initial Value)^(1 ÷ Years) − 1. For example, an investment that grew from $10,000 to $18,000 in 5 years: CAGR = (18,000 ÷ 10,000)^(1÷5) − 1 = 1.8^0.2 − 1 ≈ 12.47% per year. The result means the investment effectively grew at 12.47% per year on a compounded basis.
- What is the difference between CAGR and absolute return?
- Absolute return is simply the total percentage gain without accounting for time. A 50% absolute return looks great — but if it took 20 years, that is a CAGR of only 2% per year. CAGR normalises for time, making it the correct metric for comparing investments held for different periods. Always compare investments using CAGR rather than absolute return.