What is CAGR?
CAGR (Compound Annual Growth Rate) is the average annual rate of return of an investment over a specified period, assuming profits are reinvested. It smooths out volatility to give you one clean number representing growth.
CAGR is the best way to compare returns across different investments — a mutual fund that went from ₹1L to ₹3L in 5 years has a 24.6% CAGR, regardless of year-to-year fluctuations.
Formula
CAGR = ((Final Value / Initial Value)^(1/n) − 1) × 100
Where n = number of years
Absolute Return = ((Final − Initial) / Initial) × 100
For ₹1,00,000 growing to ₹3,00,000 in 5 years: - CAGR = ((3,00,000/1,00,000)^(1/5) − 1) × 100 = 24.57% - Absolute Return = 200%
How to use this CAGR Calculator?
1. Enter the initial investment value. 2. Enter the current or final value. 3. Enter the number of years. 4. See the CAGR, absolute return, and total gain.