CAGR Calculator

What This CAGR Calculator Does

CAGR, or Compound Annual Growth Rate, expresses the return of an investment over multiple years as a single, steady annual percentage - as if it had grown at exactly that rate every single year, even though real investments rarely do. This calculator computes the CAGR between any starting value, ending value, and duration you enter.

The Formula

CAGR = [(Final Value / Initial Value)^(1/years) - 1] × 100. Because it takes an n-th root rather than a simple average, CAGR correctly accounts for compounding - it is not the same thing as dividing the total percentage gain by the number of years, which would overstate the true annual growth rate.

How to Use It

Enter the value you started with, the value you ended up with, and the number of years between the two. The result is the annualised growth rate that connects those two numbers - useful for comparing investments held for different lengths of time on a like-for-like basis.

Why CAGR Beats a Simple Average

Imagine an investment that grows 50% in year one and then falls 50% in year two - the simple average return is 0%, but the actual value is down 25% overall, because the loss applies to a larger base. CAGR captures this correctly: it would come out negative, reflecting the real outcome, not the misleading arithmetic average.

Who This Is For

Anyone comparing the historical performance of two investments held for different time periods - a fund held for 3 years versus one held for 7, for instance - or wanting to convert a fund's "grew from X to Y" figure into the annualised percentage most performance tables actually quote.

Quick Example

An investment that grew from ₹1,00,000 to ₹2,50,000 over 8 years has a CAGR of approximately 12.14% - a single, comparable figure, even though the fund's actual year-to-year returns almost certainly varied above and below that number along the way.