FINBIZTOOLS
CAGR Calculator
Find the annualized growth rate between an initial and final value.
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CAGR smooths growth over time and does not describe yearly fluctuations or interim cash flows.
How it works
Enter positive initial and final values and the time between them in years. Use decimal years if needed. A final value below the initial value produces a negative CAGR.
Formula
CAGR = [(final value ÷ initial value)^(1 ÷ years) − 1] × 100. This is a smoothed annual growth rate between two points. It is not a measurement of volatility or the actual return in any particular year.
Example
An investment growing from ₹1,00,000 to ₹2,00,000 over 5 years has a CAGR of approximately 14.8698%. The total growth is ₹1,00,000. Equal initial and final values produce 0% CAGR.
When to use another tool
If you have made additional deposits or withdrawals, use XIRR with their actual dates. Zero or negative starting/final values are outside this CAGR definition.
Frequently asked questions
How is CAGR different from absolute growth?
Absolute growth measures the total change. CAGR expresses a smoothed annual rate over the entered period.
Can I use CAGR after adding more money?
Use XIRR instead, because additional cash flows affect the annualized return.
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Disclaimer
This calculator provides an estimate based on the assumptions entered and does not guarantee investment returns. Results are informational, not financial, lending, tax or legal advice. Verify important decisions with a qualified professional. See our Disclaimer.