CAGR Calculator
The Compound Annual Growth Rate (CAGR) shows you how much the amount you invested has grown over a set period of time.
It is assumed that the profits are put back into the business every year for the calculation. The CAGR shows how well an investment is making money. The calculator makes it easier to look at different investments and business metrics over time.
CAGR shows long-term growth because it takes compounding into account. But it can be hard to figure it out by hand, which is why a CAGR Calculator is helpful.
What is a CAGR Calculator?
A CAGR (Compound Annual Growth Rate) Calculator is a digital tool used to determine the average annual growth rate of an investment over a specific period of time (longer than one year).
While most investments fluctuate wildly, gaining 20% one year and losing 5% the next, the CAGR "smooths" these returns.
It shows you what the steady, fixed annual interest rate would have been if the investment had grown at the same rate every year with all profits being reinvested.
The CAGR FormulaThe calculator uses the following mathematical formula to find the growth rate:
CAGR = [(Ending Value/Beginning Value)^1/n -1] X100
Where
Ending Value = The current value of the investment
Beginning Value =The initial amount invested
n =The number of years the investment was held.
Example
Imagine if you invested ₹1,00,000 and it grew to ₹1,60,000 over 5 years, the calculator would process the math and show a CAGR . Let us see at what rate the initial invested amount grew?
CAGR = [(160000/100000)^1/5 -1] X100
= ~ 9.86%
How does a CAGR Calculator Help You?
A CAGR (Compound Annual Growth Rate) Calculator is more than just a math tool; it's a way to check the truth about your investments. The CAGR calculator gives you a single, steady percentage that shows how your money really grew over time.
Standardizes Performance Comparison:
It lets you compare different investments in a fair way. For instance, you can compare a Mutual Fund that grew over three years to a Fixed Deposit that grew over five years by looking at their annual percentage instead of just the final profit.
Makes things less volatile:
Markets are like a rollercoaster. It could be +20% one year and -10% the next. A CAGR calculator ignores this "noise" and shows you the steady rate of return you would have needed to reach your final goal. This gives you a better idea of what the long term will look like.
Set goals:
Helps you set realistic financial goals by letting you work backward. If you want to double your money in seven years, a CAGR calculator will tell you that you need to invest in something that pays about 10.4% interest each year.
Checks Benchmarks:
You can see if your own portfolio is really doing better than the market. You can see if your investment strategy is doing better than the market by comparing your portfolio's CAGR to an index like the Nifty 50.
Helps with planning for retirement:
Since retirement lasts for decades, small changes in annual rates can make a big difference in the final amount. The calculator helps you guess how much your current lump sum will grow in 20 to 30 years.
How to use Stockify's CAGR Calculator?
Here are the simple steps to use Stockify's CAGR Calculator:
Enter your investment's starting value in the "Initial Investment" or "Beginning Value" field.
Input the final value of your investment in the "Final Value" or "Ending Value" field.
Specify the total time period of your investment in years in the designated field.
Click the "Calculate" button to instantly compute your CAGR.
You then get to see the annualised growth rate as a percentage.
Use the result to analyse performance, compare assets, or plan future financial goals.
Advantages of Stockify’s CAGR Calculator
Some advantages of Stockify’s CAGR Calculator are:
Instant & Accurate Results
Get error-free CAGR rates instantly to know investment growth, eliminating the need for complex manual formulas and saving you valuable time.
User-Friendly
Its simple design requires no financial expertise, allowing anyone to navigate and use the tool with ease.
Ease Fast and Smart Comparisons
Quickly compare the performance of multiple investments side-by-side to make informed, data-driven decisions.
Get Shareable & Actionable Insights
Easily save, export, or share your calculations for future review, collaborative planning, or tracking progress.
Accessible & Completely Free
Access the tool from any device without registration, offering reliable analysis on-the-go at absolutely no cost.
Use CAGR calculator.
FAQ
A CAGR (Compound Annual Growth Rate) calculator is an online tool that figures out the average annual growth rate of an investment. It is figured out over a time period of more than one year. It gives you a steady annual rate, as if the investment grew steadily over time.
You need to enter three main values to find the CAGR: Beginning Value: The amount of money you put in at first. Ending Value: The investment's last value at the end of the period. Investment Tenure: How long the investment was kept. Then, the calculator uses the formula CAGR = [(EndingValue/BeginningValue)^(1/n)−1]×100.
Absolute returns show the percentage growth over a certain period of time. A 40% gain over three years is good, but a 40% gain over ten years may not be as good when you take inflation into account. CAGR takes into account how long the investment will last. This lets you look at different assets side by side.
No, CAGR does not take into account market risk. Instead, it assumes the same growth rate.
No, CAGR is only good for one-time (point-to-point) investments. And because SIPs have multiple cash flows it is best to use XIRR (Extended Internal Rate of Return). XIRR takes into account the timing and amount of each individual installment correctly.
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