CAGR Calculator
Calculate the compound annual growth rate for any investment, business metric, or portfolio.
CAGR Benchmarks
CAGR
14.87% / yr
Total Growth
100%
Absolute Gain
$100,000.00
The CAGR Formula
CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) − 1
Your investment grew from $100,000.00 to $200,000.00 over 5 years. That is a total growth of 100%, which translates to a CAGR of 14.87% per year.
CAGR smooths out year-to-year volatility — it tells you the steady, consistent rate that would produce the same end result as the actual path the investment took.
Frequently Asked Questions
What is CAGR?
CAGR stands for Compound Annual Growth Rate. It is the rate at which an investment would need to grow each year to reach its ending value from its beginning value, assuming growth was compounded annually.
How is CAGR calculated?
CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Number of Years) − 1. For example, if an investment grew from ₹1,00,000 to ₹2,00,000 in 5 years, the CAGR = (2,00,000 ÷ 1,00,000)^(1/5) − 1 = 14.87% per year.
What is a good CAGR for a stock or mutual fund?
In Indian equity markets, large-cap mutual funds typically deliver 12–15% CAGR over 10-year periods. Small-cap funds may return 15–20%. In US markets, the S&P 500 has delivered ~10% CAGR historically. Beating these benchmarks consistently is considered strong performance.
What is the difference between CAGR and average annual return?
Average annual return (arithmetic mean) just averages the yearly returns, while CAGR (geometric mean) accounts for compounding. If a fund returned +50% then −33%, the average is 8.5%, but the actual CAGR is 0% — you're back where you started. CAGR always gives the true picture.
What is the difference between CAGR and ROI?
ROI is the total return over the entire investment period. CAGR converts that total return into a per-year figure. A 100% ROI over 10 years is 7.2% CAGR. A 100% ROI over 2 years is 41.4% CAGR. CAGR makes comparisons across different time horizons meaningful.
Can I use CAGR to project future growth?
Yes — CAGR is widely used for projections, but with the caveat that past performance doesn't guarantee future results. This calculator shows the projected year-by-year growth if the same CAGR continues.
What does a negative CAGR mean?
A negative CAGR means the investment lost value over the period. For example, if your portfolio went from ₹1,00,000 to ₹70,000 over 5 years, the CAGR is −6.9% per year.
How is CAGR used in business?
Companies use CAGR to report growth in revenue, profits, users, or market share. Investors use CAGR to compare the growth rates of different companies. A business growing at 25% CAGR for 5 years will roughly triple in size.
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