Free CAGR Calculator Online – Calculate Compound Annual Growth Rate Instantly

📈 CAGR Calculator

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📐 CAGR Formula (How it works):

CAGR = [(Final Value / Initial Value)^(1/n) - 1] × 100

Where:

• Final Value = Maturity Amount

• Initial Value = Investment Amount

• n = Number of Years

CAGR shows smoothed annual returns. It doesn't show volatility. Absolute returns and XIRR are also used for performance measurement.

📖 Understanding CAGR (Compound Annual Growth Rate)

CAGR (Compound Annual Growth Rate) is the mean annual growth rate of an investment over a specified time period longer than one year. It represents one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time.

Unlike absolute returns which simply show total percentage growth, CAGR smooths out the returns and shows you what the annual growth rate would have been if the investment grew at a steady rate. This makes it easier to compare different investments.

For example, if ₹1,00,000 grows to ₹1,76,234 in 5 years, the CAGR is 12%. This means your money grew as if it earned exactly 12% every year compounded annually, even though actual yearly returns may have fluctuated.

CAGR is widely used for measuring mutual fund performance, stock returns, business revenue growth, and comparing investment options. However, CAGR assumes smooth growth and doesn't reflect the risk or volatility in an investment. For SIP investments, use XIRR for more accurate returns.

❓ Frequently Asked Questions (FAQ)

Question: What is the difference between CAGR and absolute returns?

Absolute return shows total growth (e.g., 76% in 5 years). CAGR shows annualized growth (12% per year).

Question: Is CAGR better than XIRR?

Use CAGR for lump sum investments. Use XIRR for SIP or multiple cash flows at different times.

Question: What is a good CAGR for equity investments?

12-15% CAGR is considered good for equity mutual funds over 7-10+ years. Nifty 50 has given ~12% historically.

📈 CAGR Calculator

📖 Understanding CAGR (Compound Annual Growth Rate)

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❓ Frequently Asked Questions (FAQ)