CAGR Calculator
Calculate CAGR (Compound Annual Growth Rate) for investments and business metrics.
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Calculate CAGR
What is CAGR?
CAGR (Compound Annual Growth Rate) represents the annual growth rate of an investment over a specified period, assuming profits are reinvested.
CAGR Formula
CAGR = (Final Value / Initial Value)1/n - 1
Where n = number of years
Why Use CAGR?
- Compares investments with different time periods
- Shows smoothed annual growth rate
- Better than simple average returns
CAGR Example
An investment grows from ₹1 lakh to ₹2.5 lakhs in 5 years:
- CAGR = (2,50,000 / 1,00,000)1/5 - 1 = 20% per annum
Frequently Asked Questions
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CAGR accounts for compounding, while average return is a simple mean. CAGR is more accurate for measuring growth.
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For stock investments, 12-15% CAGR is considered good. For fixed deposits, 5-6% is typical.