Calculate CAGR
Calculate Compound Annual Growth Rate
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Growth Over Time
About CAGR Calculator
CAGR (Compound Annual Growth Rate) is the average annual growth rate of an investment over a specific period. It helps you understand the annualized return on your investment, smoothing out volatility.
CAGR Formula
CAGR = [(Final Value / Initial Value)^(1/Number of Years)] - 1
CAGR provides a smoothed annual growth rate, making it easier to compare investments with different time periods.
Frequently Asked Questions
CAGR (Compound Annual Growth Rate) is the average annual growth rate of an investment over a specific period, assuming the investment grows at a steady rate. It smooths out volatility.
CAGR = [(Final Value / Initial Value)^(1/Number of Years)] - 1. For example, if ₹10,000 becomes ₹20,000 in 5 years, CAGR = [(20000/10000)^(1/5)] - 1 = 14.87%.
A good CAGR depends on the investment type. Equity mutual funds may give 12-15% CAGR over long term, debt funds 6-8%, and fixed deposits 6-7%. Higher CAGR indicates better performance.
Absolute returns show total percentage gain over the period, while CAGR shows the annualized average growth rate. CAGR is better for comparing investments with different time periods.