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CAGR calculator
The steady yearly growth rate between a start and an end value.
Quick answer
CAGR, the compound annual growth rate, is the steady yearly rate that takes a starting value to an ending value. Formula: CAGR = (End value ÷ Start value)^(1 ÷ years) − 1. Money that doubles in 5 years grew at a CAGR of 14.87%.
Read the guide: How to calculate CAGR, with examples
CAGR
14.87%
- Total growth
- 100.00%
- Absolute gain
- ₹10,000
CAGR smooths out the ups and downs. The real path was probably bumpier than a steady rate.
How is CAGR calculated?
CAGR answers: what steady yearly rate would turn the start value into the end value over this time?
It lets you compare investments held for different lengths of time on the same footing.
It ignores what happened in between, so two very different journeys can have the same CAGR.
What is the formula for CAGR?
- CAGR = (End value ÷ Start value)^(1 ÷ years) − 1
- Multiply by 100 to get a percentage
Can you show a worked example of CAGR?
₹10,000 growing to ₹20,000 in 5 years: (20,000 ÷ 10,000)^(1/5) − 1 = 0.1487, so CAGR = 14.87% a year.
What CAGR does it take to grow your money?
The yearly growth rate needed to turn the amount into the multiple shown in the given time.
| Growth to | 3 years | 5 years | 7 years | 10 years |
|---|---|---|---|---|
| 1.5 times | 14.47% | 8.45% | 5.96% | 4.14% |
| 2 times | 25.99% | 14.87% | 10.41% | 7.18% |
| 3 times | 44.22% | 24.57% | 16.99% | 11.61% |
| 5 times | 71% | 37.97% | 25.85% | 17.46% |
Common questions
Is CAGR the same as average return?
No. An average of yearly returns ignores compounding. CAGR is the single steady rate that reproduces the final value.
Can CAGR be negative?
Yes, if the end value is lower than the start value.
Does CAGR work with SIPs?
Not directly, because money goes in at different times. Use XIRR for a SIP; this tool is for one start value and one end value.
What does CAGR ignore?
Volatility and the path taken. A fund that swung wildly and one that rose steadily can show the same CAGR.