📈 CAGR Calculator
Compound Annual Growth Rate – Calculate investment returns
| Year | Investment Value | Period Growth | Total Return |
|---|
What is CAGR Calculator
A CAGR calculator helps investors calculate the Compound Annual Growth Rate (CAGR) of an investment over a specific period. CAGR shows the average yearly growth rate of an investment assuming the profits are reinvested every year.
In simple terms, CAGR tells you how fast your investment grew per year over time, even if the actual returns fluctuated. Financial education platforms like Investopedia often use CAGR to compare the performance of stocks, mutual funds, and other investments.
For example, if an investment grows from $10,000 to $20,000 in 5 years, the CAGR calculator determines the annual growth rate required to reach that value.
CAGR Formula
The Compound Annual Growth Rate is calculated using this formula:
CAGR = (Final Value / Initial Value)^(1 / Number of Years) − 1
Where:
| Term | Meaning |
|---|---|
| Initial Value | Starting investment amount |
| Final Value | Ending value of the investment |
| Number of Years | Number of Years |
How to Use a CAGR Calculator
Change the currency from the currency drop-down menu and select INR (₹), USD ($), EUR(€), GBP(£), JPY(¥) and BTC(₿). Using a CAGR calculator is simple and requires only three inputs.
Follow these steps:
- Enter the Initial Investment Value(Input the amount you originally invested.)
Example: $10,000 - Enter the Final Value(Enter the value of the investment at the end of the period.)
Example: $20,000 - Enter the Time Period(Provide the number of years the investment was held.)
Example: 5 years - Click Calculate(The calculator will instantly display the Compound Annual Growth Rate (CAGR))
Example output: CAGR = 14.87%
Why Investors Use a CAGR Calculator
Investors use CAGR to:
- compare different investments
- evaluate portfolio performance
- measure long-term investment growth
- analyze stock and mutual fund returns
CAGR is especially useful when comparing investments that were held for different time periods.
What is a good CAGR rate?
A “good” CAGR depends on the type of investment.
Typical benchmarks:
| Investment Type | Average CAGR |
|---|---|
| Stocks | 7–10% |
| Mutual Funds | 8–12% |
| Real Estate | 5–8% |
Limitations of CAGR
Although CAGR is useful, it has some limitations:
- It assumes steady growth each year
- It does not show market volatility
- It does not account for additional investments or withdrawals
Because of this, CAGR is usually used alongside other metrics like ROI or total return.
What is the difference between CAGR and absolute return?
| Metric | Meaning |
|---|---|
| CAGR | Average yearly growth rate |
| Absolute Return | Total return over the entire period |
CAGR shows annualized performance, while absolute return shows total growth.
Can CAGR be negative?
Yes. If the final investment value is lower than the initial value, the CAGR will be negative. This indicates that the investment lost value over time.
How to Download the CAGR Report?
To download the calculated CAGR() report, simply calculate the value using the calculator and click on “Download PDF” button.
