CAGR Calculator
Calculate the Compound Annual Growth Rate (CAGR) of your investments to measure average annual growth over time. Visualize growth projections with interactive charts.
Investment Details
CAGR Results
Compound Annual Growth Rate
Understanding Compound Annual Growth Rate (CAGR)
CAGR (Compound Annual Growth Rate) is a financial metric that measures the mean annual growth rate of an investment over a specified period longer than one year. It represents one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time.
The CAGR formula smooths the growth trajectory of an investment as if it had grown at a steady rate on an annually compounded basis. This makes it easier to compare the performance of different investments over various time periods.
Example Calculation:
If you invested ₹1,00,000 and after 5 years it’s worth ₹1,95,000:
CAGR = (195000 / 100000)(1/5) – 1 = 1.1431 – 1 = 0.1431 or 14.31%
| Year | Value at 14.31% CAGR |
|---|---|
| 0 | ₹1,00,000 |
| 1 | ₹1,14,310 |
| 2 | ₹1,30,670 |
| 3 | ₹1,49,370 |
| 4 | ₹1,70,770 |
| 5 | ₹1,95,000 |
Why Use CAGR?
- Measures consistent annual growth rate
- Simplifies comparison of different investments
- Accounts for compounding effect
- Smooths volatile year-to-year growth
- Helps in long-term financial planning
- Useful for evaluating investment performance
- Provides a clear picture of investment growth
Key Applications
- Evaluating mutual fund performance
- Comparing stock market returns
- Analyzing business revenue growth
- Assessing real estate appreciation
- Projecting future investment values
- Benchmarking against market indices