How the CAGR Calculator Works
Enter the initial value of your investment, its final value, and the number of years between the two. The calculator computes the compound annual growth rate that would take you from the initial value to the final value.
CAGR smooths out year-to-year volatility into a single average annual growth figure, which is useful for comparing investments of different types or durations on a like-for-like basis.
Formula Used
CAGR is calculated using the following formula:
CAGR = ((Final Value / Initial Value) ^ (1/n) − 1) × 100- nNumber of years between the initial and final value
Example Calculation
Suppose an investment grows from an initial value to a final value over 5 years.
- Initial Value₹1,00,000
- Final Value₹2,00,000
- Time Period5 years
- ResultCAGR ≈ 14.87%
Important Assumptions
- CAGR assumes smooth, consistent compounding and does not reflect actual year-to-year volatility, which can be significant for market-linked investments.
- This calculator assumes a single initial value and a single final value, with no interim cash flows (additions or withdrawals).
- For investments with periodic cash flows such as SIPs, CAGR is not directly applicable — use the SIP Calculator or an XIRR calculation instead.