CAGR Calculator
Work out the compound annual growth rate between two values, or reverse it to see what an amount grows to, or what you need to start with.
CAGR
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Starting value
Final value
Gain
CAGR
Absolute return
Multiplier
Doubles every
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Growth at this CAGR, year by year
| After | Value | Multiplier |
|---|
CAGR assumes the value grew at the same rate every year. Real investments rise and fall along the way, so the year-by-year path is a smoothed illustration, not what actually happened. Results are before tax and indicative only.
What is CAGR?
CAGR (compound annual growth rate) is the constant yearly rate at which a value would have to grow to get from its starting value to its final value over a given period. It turns an uneven journey into one comparable number per year.
If a fund went from ₹1,00,000 to ₹2,00,000 in five years, it may have gained 30% one year and lost 10% the next. CAGR tells you it grew at the equivalent of 14.87% a year, which you can compare directly with a fixed deposit, an index or another fund over the same period.
CAGR formula
Example: ₹1,00,000 growing to ₹2,00,000 in 5 years gives (2,00,000 ÷ 1,00,000)1/5 − 1 = 20.2 − 1 = 14.87%. The absolute return is 100%, but spread over five years of compounding it works out to 14.87% a year, not 20%.
For periods that aren’t whole years, use years as a decimal: 3 years 6 months is 3.5.
Reverse CAGR: final value and starting amount
Reverse CAGR runs the formula the other way. Use it when you know the growth rate and want the amount.
Starting amount = Final value ÷ (1 + CAGR)years
- ₹1,00,000 growing at 12% a year for 10 years becomes ₹3,10,585.
- To have ₹1 crore in 20 years at 12% a year, you would need to invest ₹10,36,668 today.
Pick the “Reverse” tabs above to run these with your own numbers. For regular monthly investing towards a target, the SIP calculator is the better tool.
How to calculate CAGR in Excel or Google Sheets
Put the starting value in A2, the final value in B2 and the number of years in C2. Then use any of these; they give the same answer:
=POWER(B2/A2, 1/C2)-1
=RRI(C2, A2, B2)
RRI is Excel’s built-in “equivalent rate of return” function and also works in Google Sheets. Format the cell as a percentage. For reverse CAGR, the final value is =A2*(1+D2)^C2, where D2 holds the CAGR.
CAGR vs XIRR vs absolute return
| Measure | Best for | Limitation |
|---|---|---|
| Absolute return | Holdings under a year | Ignores time, so a 50% gain over 1 year and over 10 years look the same |
| CAGR | One lumpsum; comparing fund, index or company growth over a period | Needs a single start and end value; wrong for SIPs or top-ups |
| XIRR | SIPs, top-ups and withdrawals on different dates | Needs every cash flow with its date |
If you invested through a SIP, a CAGR from total invested to current value understates your return, because it treats every instalment as if it went in on day one. Use the XIRR calculator for that, and see XIRR vs CAGR explained for worked fund examples.
What CAGR doesn’t tell you
It hides the ride. Two funds with the same 12% CAGR can have very different ups and downs. CAGR says nothing about how far an investment fell along the way.
It depends on the dates you pick. Starting at a market peak or a trough changes CAGR a lot. When comparing funds, use the same start and end dates, and look at several periods.
It isn’t adjusted for inflation or tax. A 7% CAGR with 5% inflation is roughly a 2% real return. The inflation calculator shows what a future amount is worth in today’s money.
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