CAGR calculator
OVER 5 YEARS
20.11% a year
Hover a point on the line to see its estimated value.
Tap a point on the line to see its estimated value.
CAGR basics
What is CAGR?
Compound annual growth rate (CAGR) is the single yearly rate that would take an amount from where it started to where it ended, if it grew by the same percentage every year and each year's growth were added before the next.
It turns two amounts and a length of time into one number you can compare. It is a summary: real investments rarely grow by the same percentage each year.
How is CAGR calculated?
CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1
When you enter dates, the period is the elapsed days divided by 365.25. The rate shown is compounded once a year.
Worked example: ₹2,00,000 that ended at ₹3,00,000 after 4 years. The ending value is 1.5 times the start, so CAGR = 1.5^(1/4) − 1 = 10.67% a year.
To see the rate after inflation, the calculator divides rather than subtracts:
after-inflation rate = (1 + CAGR) ÷ (1 + inflation) − 1
At 6% inflation, the example's 10.67% becomes 4.40% a year. Simple subtraction would give a slightly different figure, so it is not used.
What do the inputs mean?
- What it was worth then
- The amount at the beginning of the period.
- What it's worth now
- The amount at the end of the period. It can be lower than the start: that is a loss, and the rate comes out negative.
- Held for
- How long the period was, in years (part years are fine) or as two dates. See the convention above for how two dates become a period.
- Inflation
- Optional, and off until you switch it on. The yearly rise in prices, used to show the rate after inflation.
The calculator applies these bounds to each input:
- What it was worth then: more than ₹0, up to ₹1,00,00,00,000
- What it's worth now: ₹0 or more, up to ₹1,00,00,00,000 (a loss is allowed)
- Held for: more than 0 years, up to 100 (whole or part years)
- Inflation: 0% to 50%
How do I read the result?
This rate is a single average across the whole period. It does not describe the path the value took in between: two investments with the same CAGR can have taken very different routes.
It also cannot account for any money you added or withdrew along the way. For regular monthly amounts, use the SIP calculator instead.
What does CAGR leave out?
Figures are gross of tax, of any product charge, and of any fee payable to a research analyst.
It also leaves out any income paid out along the way, unless that is already reflected in the two amounts you enter.
Frequently asked questions
What is the difference between CAGR and absolute return?
Absolute return is the total change between two amounts as a percentage of the start, and it ignores time. CAGR spreads that change over the years as a yearly rate, so periods of different lengths can be set side by side.
Can CAGR be negative?
Yes, CAGR can be negative. If the ending amount is below the starting amount, the rate is negative: a loss, shown as one.
Why do dates give a slightly different period from whole years?
Dates are counted in whole days and divided by 365.25, the average length of a year. A calendar year with no leap day is 365 days, so it comes out a shade under one year (365 ÷ 365.25 = 0.9993). One that includes a leap day is 366 days, a shade over (366 ÷ 365.25 = 1.0021). The two cancel over four calendar years: 1,461 days ÷ 365.25 is exactly 4.
How do I calculate CAGR in Excel?
Put the starting value in A2, the ending value in B2 and the number of years in C2, then enter =(B2/A2)^(1/C2)-1 and format the cell as a percentage. In Excel, =RRI(C2,A2,B2) gives the same figure. If you use dates, this calculator divides the days between them by 365.25, so its period can differ slightly from a whole-year count.
What is a good CAGR?
There is no single figure that counts as good. Whether a rate is high or low depends on the period it covers, what the money was invested in, and what you compare it with, such as inflation over the same years. Switch on inflation here to see the rate after it.
What is the difference between CAGR and XIRR?
CAGR needs only two amounts, a start and an end. XIRR is for investments with several dated payments in and out, such as a SIP, and needs every date and amount.
Can I use CAGR for a SIP?
Not for a running SIP. CAGR assumes one amount at the start and one at the end, with nothing added or withdrawn between. A SIP adds money every month, so one CAGR does not describe it, and XIRR, which takes every dated payment, is the usual measure. To see what regular monthly amounts could grow to at a rate you choose, use the SIP calculator.
Can I use CAGR to compare two investments?
It puts both on the same yearly footing, but only if their periods are comparable and no money was added or taken out along the way. It describes what already happened and says nothing certain about what comes next.
Does the calculator save or send my numbers?
No, the CAGR calculator does not save or send your numbers. It runs in your browser. No number you type is stored or sent anywhere, or added to the page address. Sharing the calculator sends only a link to this page.