The CAGR Calculator finds the Compound Annual Growth Rate of an investment — the steady yearly rate that would take your initial value to the final value over a given period. Enter the starting value, the ending value, and the number of years, and it instantly shows the CAGR, the absolute (total) return, and the total gain.
CAGR is the standard way to compare investments of different sizes and time periods, because it smooths out the ups and downs into a single annual figure. Everything is calculated in your browser.
How to calculate CAGR
- Enter the initial value (what you started with).
- Enter the final value (what it is worth now, or at the end).
- Enter the duration in years.
- Read the CAGR, the absolute return, and the total gain.
How CAGR is calculated
CAGR = (final value ÷ initial value)^(1 ÷ years) − 1, expressed as a percentage. It answers the question: what single annual growth rate, compounded each year, turns the start value into the end value?
Worked example: ₹1,00,000 that grows to ₹2,00,000 over 5 years has a CAGR of (2,00,000 ÷ 1,00,000)^(1/5) − 1 = 14.87% a year. The absolute return is 100% — but spread over 5 years that is 14.87% compounded annually.
CAGR vs absolute return
Absolute return is simply the total percentage gain — in the example above, 100%. CAGR converts that into a per-year rate, which makes it comparable across different time periods. A 100% return over 5 years (14.87% CAGR) is very different from 100% over 10 years (7.18% CAGR), even though the absolute return is the same.
CAGR needed to double your money
A useful way to read CAGR is in terms of doubling. The table shows the annual growth rate your money needs to double over different periods — a quick sanity check for any investment.
The CAGR required to exactly double your money.
| Years to double | CAGR needed |
|---|---|
| 5 years | 14.9% |
| 7 years | 10.4% |
| 10 years | 7.2% |
| 15 years | 4.7% |
| 20 years | 3.5% |
Frequently Asked Questions
What is CAGR?
CAGR (Compound Annual Growth Rate) is the steady annual rate at which an investment would have to grow, compounding each year, to go from its initial value to its final value over a given period.
How is CAGR calculated?
CAGR = (final value ÷ initial value)^(1 ÷ number of years) − 1. For ₹1,00,000 growing to ₹2,00,000 in 5 years, that is (2)^(1/5) − 1 = 14.87% a year.
What is the difference between CAGR and absolute return?
Absolute return is the total percentage gain over the whole period; CAGR expresses that as a per-year rate. CAGR lets you compare investments held for different lengths of time.
Can CAGR be negative?
Yes. If the final value is lower than the initial value, the investment lost money and the CAGR is negative, showing the average annual rate of decline.