CAGR Calculator



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CAGR (in percentage %):


What is CAGR?

A Compound Annual Growth Rate (CAGR) calculator online is a financial tool used to measure the annual growth rate of an investment over a specific time period, assuming the investment has been compounding steadily. It helps investors understand how well their investment has grown year-over-year, factoring in compounding returns.

CAGR is especially useful for comparing the performance of different investments or projecting future value based on historical data. It provides a smoothed rate of return, removing volatility and short-term fluctuations.

How Does the CAGR Calculator Work?

The formula used by the CAGR calculator is

CAGR = [(Ending Value / Beginning Value)^(1 / n)] – 1

Where:

Beginning Value = Initial investment amount

Ending Value = Value of the investment at the end of the period

n = Number of years

For example, if your investment grew from ₹1,00,000 to ₹1,50,000 in 3 years:

CAGR = [(150000 / 100000)^(1/3)] – 1 ≈ 14.47%

By using a Compound Annual Growth Rate (CAGR) calculator online, you can instantly compute this without manual effort, helping you evaluate investment performance or make future projections more confidently.


Frequently Asked Questions:


1. What does CAGR tell me?
It shows the average annual growth rate of an investment, assuming profits are reinvested each year.
2. Is CAGR better than average return?
Yes, because it accounts for compounding and offers a more accurate long-term picture.
3. Can I use CAGR for SIP or recurring investments?
No, CAGR works best for lump sum investments. SIPs require XIRR or IRR.
4. What’s a good CAGR?
It depends on the asset class. For example, 10–15% annually is generally good for equities.
5. Can the CAGR calculator predict future returns?
Not exactly. It analyzes past performance, which can guide expectations but doesn’t guarantee future results.