CAGR Calculator
Calculate Compound Annual Growth Rate for your investments with advanced features like SIP comparison, inflation adjustment, and multi-period analysis
Investment
Initial Value
Final Value
Period (Years)
CAGR
Investment 1
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Investment 2
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Investment 3
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CAGR Calculation Results
CAGR
Compound Annual Growth Rate
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TV
Total Value
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AG
Absolute Growth
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PG
Percentage Growth
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Inflation-Adjusted CAGR:
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After-Tax CAGR:
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Industry Comparison:
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Year-by-Year Breakdown
| Year | Starting Value | Ending Value | Annual Growth | Cumulative Growth |
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Understanding CAGR
What is CAGR?
CAGR (Compound Annual Growth Rate) is the mean annual growth rate of an investment over a specified period of time 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.
How is CAGR calculated?
CAGR is calculated using the formula:
CAGR = (Ending Value / Beginning Value)^(1 / Number of Years) - 1
This formula smooths the growth rate as if the investment had grown at a steady rate on an annually compounded basis.
Why use CAGR instead of average returns?
CAGR provides a clearer picture of investment performance because it accounts for compounding, unlike simple average returns. It eliminates the effects of volatility and gives you a smoothed annual rate that, if repeated each year, would get you from your initial investment to your ending value.
What are the limitations of CAGR?
While CAGR is useful, it has limitations:
- It doesn't account for investment risk or volatility
- It assumes a smooth growth path, which rarely happens in reality
- It doesn't consider additional contributions or withdrawals
- It can be misleading for short time periods with high volatility
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