CAGR Calculator
Determine the consistent Compound Annual Growth Rate of your investments over a period of time.
Ten Thousand Rupees
Twenty Thousand Rupees
Five years
CAGR Result
14.87%
Implied Growth Trajectory
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Yearly Breakdown
CAGR Deep Dive
What is CAGR
Compound Annual Growth Rate is the constant annual rate that would turn a beginning value into an ending value over a stated duration. It summarises the endpoints; it does not show the returns earned in each individual year.
For investment performance, the basic calculation suits a lump sum without intermediate contributions, withdrawals or cash distributions. It can also describe growth in positive, consistently measured business figures such as revenue.
A worked CAGR example
If ₹3,00,000 becomes ₹6,45,000 over exactly eight years, with no intervening external cash flows, the CAGR is 10.04% a year. The total gain is ₹3,45,000 and the absolute return is 115%.
Both percentages describe the same endpoint change. CAGR adds the elapsed time and compounding to that description.
What the chart shows
The implied growth trajectory applies the calculated rate evenly between the beginning and ending values. It is a smoothed illustration, not a record of actual annual balances or a prediction of future returns.
How to Use the CAGR Calculator
Enter a positive beginning value.
Enter a positive ending value in the same currency and on the same valuation basis.
Enter the elapsed years. The current duration control uses half-year steps, so 5.5 represents five years and six months.
Read the annualised result and the implied growth table.
For comparisons, align dates, currency, investment category and treatment of distributions, costs and taxes.
Do not use total contributions as the beginning value for a SIP. Each contribution was invested for a different length of time.
How CAGR Is Calculated
The CAGR formula
Beginning value and duration must be greater than zero. The formula can annualise a fractional year, although short periods magnify temporary movements. For example, 5% growth over half a year annualises to 10.25%; it does not establish the return over a full future year.
CAGR and absolute return
Doubling in five years gives a CAGR of 14.87%. Doubling in ten years gives 7.18%. Both have an absolute return of 100%.
Dividing a total return by years does not produce CAGR. It also does not produce the arithmetic average of observed yearly returns unless those yearly observations have actually been used.
CAGR and average annual return
A value that rises from ₹100 to ₹150, then falls to ₹75, has yearly returns of +50% and −50%. Their arithmetic average is 0%, while the two-year CAGR is −13.40%.
This explains why averaging annual percentages can give a different result from measuring compound endpoint growth.
Interpreting CAGR
CAGR and cash flow returns
Use CAGR for endpoint growth without intermediate external cash flows. IRR handles amounts at equally spaced intervals; XIRR handles amounts with actual dates. Microsoft's documentation distinguishes these timing methods. [1][2]
The IRR Calculator uses annual rows. It is not a dated XIRR calculator. The SIP Calculator projects future regular contributions rather than measuring historical SIP performance.
Dividends and mixed portfolios
For a total-return comparison, use values that reflect reinvested distributions. If dividends were paid out, their timing matters; simply adding them to the final balance ignores when they were received.
A mixed portfolio can use endpoint CAGR only when external cash flows do not distort those endpoints. Adding money to the portfolio is not investment growth.
Inflation and comparisons
Use decimal rates measured over the same period. A 10% nominal CAGR and 5% annualised inflation give real growth of 4.76%. Subtraction gives only an approximation.
Compare the same market window and an appropriate benchmark. CAGR alone cannot show volatility, drawdowns, liquidity or investment risk. A historical CAGR is descriptive; a planning rate is an assumption.
Use the ROI Calculator for total return, the Compound Interest Calculator for assumed future growth and the Inflation Impact Calculator for purchasing power.
Frequently Asked Questions
Can CAGR be negative?
Can I calculate CAGR when the ending value is zero?
Is CAGR only valid for periods longer than one year?
What is a good CAGR?
Does CAGR forecast future wealth?
Assumptions and Disclaimer
CAGR summarises comparable positive endpoints and elapsed time. It cannot reconstruct the path or correct for external cash flows. Negative endpoints are outside the standard financial calculation.
This is education, not investment advice. Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Past performance does not guarantee future results.
Sources and Review
- Microsoft Excel IRR function documentation
- Microsoft Excel XIRR function documentation
- AMFI investor education on mutual funds and SIPs
Content reviewed on 26 October 2026.