CAGR Calculator
Type part-years in the box - 2.5 for two and a half years.
Growth at Your CAGR
What is CAGR?
CAGR (Compound Annual Growth Rate) is the steady yearly rate at which an investment would have to grow, with its gains reinvested, to get from its starting value to its ending value. Real returns zig-zag from year to year; CAGR replaces them with one smooth annual figure you can compare across stocks, mutual funds, FDs and even a company's revenue.
The GoPocket CAGR calculator works it out instantly. Enter your initial investment, the value it has grown to and how many years it took, and you get the CAGR, your total gain, the absolute return and a year-by-year view of the growth.
Year-by-Year Growth at Your CAGR
Compounding Schedule| Year | Growth in Year | Total Gain | Investment Value |
|---|
How Does the CAGR Calculator Work?
The calculator compares where your investment ended with where it started, then asks: what single rate, compounded every year for this many years, turns the first number into the second? That rate is the CAGR. Because it compounds, it is always lower than the simple average of your total return spread over the years.
Practical Example:
Suppose you invested ₹1,00,000 in a mutual fund and it grew to ₹2,50,000 in 5 years:
- Absolute Return: 150%
- Simple Average (150% ÷ 5): 30% a year
- CAGR: 20.11% p.a.
The simple average says 30%, but growing ₹1,00,000 at 30% compounded for 5 years would give over ₹3.7 lakh. The rate that actually reaches ₹2,50,000 is 20.11% - the CAGR.
What is the CAGR Formula?
Compound annual growth rate is calculated as:
Calculating CAGR in Excel or Google Sheets
With the initial value in B1, the final value in B2 and the years in B3, either formula gives the CAGR - format the cell as a percentage:
Where is CAGR Used?
Compare investments
Put a stock, a mutual fund and an FD on the same yearly footing, whatever their holding periods.
Judge a fund against its benchmark
A fund's 5-year CAGR only means something next to its benchmark index's CAGR over the same 5 years.
Track business growth
Companies report revenue and profit CAGR to show steady growth across several years.
Plan a goal
Work out the yearly growth you need to turn today's savings into a target amount by a set date.
CAGR vs XIRR vs Absolute Return:
| Return Measure | What It Measures | Best For | Accounts for Compounding |
|---|---|---|---|
| CAGR | Steady yearly growth rate between two values | Lump-sum investments, stock and fund performance, revenue growth | Yes |
| XIRR | Annualised return across many dated cash flows | SIPs, top-ups, withdrawals, irregular investments | Yes |
| Absolute Return | Total gain as a percentage of the amount invested | Holdings of under one year | No |
| Average Annual Return | Simple average of each year's return | A rough look at year-by-year performance | No - overstates growth when returns vary |
Limitations of CAGR
- It hides volatility. Two investments with the same CAGR can have taken very different, and very differently risky, paths.
- It assumes one lump sum. CAGR cannot handle money added or withdrawn along the way. For SIPs and top-ups, use the XIRR calculator instead.
- It looks only at the endpoints. Choosing a start date at a market low, or an end date at a peak, can make CAGR look much better than typical performance.
- It is backward-looking. A past CAGR does not predict future returns.
Frequently asked questions
Everything you need to know — from what we do to how we do it — in one quick FAQ section.
OPEN ACCOUNTCAGR (Compound Annual Growth Rate) is the constant yearly rate at which an investment would have grown from its starting value to its ending value, assuming the gains were reinvested every year. It smooths out the ups and downs into one comparable annual figure.
