CAGR Calculator

Suppose you invested ₹1 lakh a few years ago.
Today, that investment is worth ₹2 lakhs.

The investment has clearly grown, but there is one question many investors ask: What was the annual return?

And that answer is nothing but CAGR – Compound Annual Growth Rate

Instead of looking only at the maturity amount, CAGR helps you calculate the average annual growth rate of your investment over a period of time.

And that’s exactly what Definedge’s FREE CAGR Calculator helps you calculate.

What is a CAGR Calculator?

Definedge’s CAGR Calculator is a free online tool that helps you calculate the Compound Annual Growth Rate (CAGR) of an investment.

In simple words, CAGR tells you how much an investment grew every year on average between two points in time.

Whether you are reviewing a stock, mutual fund, business performance or any long-term investment, CAGR helps you understand growth in a simple and standard way.

How does the CAGR Calculator work?

Definedge’s CAGR calculator is simple.

You need to enter:

• Initial Investment Value
• Final Investment Value
• Investment Period

Based on these details, the calculator calculates the CAGR percentage.

The formula used is:
CAGR = (Final Value ÷ Initial Value)^(1 ÷ Number of Years) − 1

You don’t need to calculate it manually. The calculator does it instantly.

Let’s understand with an example

If you invested ₹1,00,000.
After 5 years, the investment became ₹2,00,000.

CAGR = (2,00,000 – 1,00,000)^(1 ÷ 5) – 1
CAGR = 14.87%.

This means, that your investment grew at an average rate of around 14.87% per year over the 5 years.

Benefits of using a CAGR Calculator

Definedge’s CAGR Calculator helps you:

• Calculate investment performance
• Compare different investments
• Understand annual growth rate
• Save time
• Avoid manual calculations

Looking at the final value of an investment is useful, but understanding how quickly it grew is equally important. Definedge’s CAGR Calculator helps you calculate the annual growth rate of your investment in just a few clicks.

Frequently Asked Questions (FAQs)

1. Is CAGR the same as actual yearly returns?
   No. Investments may rise or fall differently every year. CAGR only shows the average annual growth over the entire period.
2. Can I use this calculator to check my returns from Stocks?
   Yes, you can use this calculator for any assets where you are aware of the time you invested in them. Example: Fixed deposits, Lond, House, Stocks, Mutual Funds, etc.
3. Is a higher CAGR always better?
   Generally, a higher CAGR indicates stronger growth. However, investment decisions should also consider risk and other factors.