CAGR Calculator

What is CAGR?

CAGR (Compound Annual Growth Rate) is the constant annual rate of return that would turn your initial investment into the final value over the holding period. Unlike absolute return, which only tells you the total percentage gain, CAGR annualizes the growth so you can compare investments over different time horizons. For example, a 50% gain over 5 years might sound good, but it works out to about 8.45% per year—CAGR makes that clear. In India, investors use CAGR to compare mutual funds, stocks, FDs, and other assets over 3, 5, or 10 years on a like-for-like basis.

CAGR smooths out volatility: it does not show you the ups and downs in between, only the equivalent steady rate. For total return (including dividends), add the total dividends received to the final value before calculating CAGR. This calculator gives you both absolute return (total % gain) and CAGR, and optionally lets you include dividends so your return reflects real wealth built.

Formula

CAGR = (Final Value / Initial Value)^(1/years) − 1, expressed as a percentage. So if you invest ₹1 lakh and it becomes ₹2 lakh in 5 years, the ratio is 2, and 2^(1/5) − 1 ≈ 0.1487, i.e. about 14.87% CAGR. Absolute return = (Final − Initial) / Initial × 100 = 100% in this example. The calculator uses the same formula; you can enter initial value, final value, holding period in years, and optionally total dividends (added to final value for total return).

Example calculation

You invested ₹1,00,000 in a mutual fund and after 5 years the value is ₹2,00,000. You also received ₹10,000 in dividends. So effective final value = ₹2,10,000. Absolute return = (2,10,000 − 1,00,000) / 1,00,000 = 110%. CAGR = (2,10,000/1,00,000)^(1/5) − 1 ≈ 16.02%. Use the calculator above with your own numbers to get exact CAGR and absolute return, with or without dividends.

Benefits of Using This Calculator

A CAGR calculator helps you compare returns across different investments and time periods. A stock that returned 80% in 3 years and another that returned 100% in 5 years are not directly comparable—CAGR converts both to an annual rate so you can see which actually performed better. Use it to evaluate past performance of your equity, mutual funds, or FDs and to set realistic expectations for future returns based on historical CAGR of similar assets.

Including dividends gives you the true total return, which matters for dividend-paying stocks and equity funds. The tool is free and requires no sign-up; use it as often as you need to analyse your portfolio or to compare with benchmarks like Nifty 50 CAGR.

How to Use This Calculator

Enter your initial investment (or purchase price), the current or final value, and the holding period in years. If you received dividends, add the total dividends received in the optional field—they will be added to the final value for a total-return CAGR. The calculator shows CAGR %, absolute return %, and total gain in rupees.

Use half-years (e.g. 2.5) for holding periods under a year if needed. Compare multiple investments by running the calculator for each and comparing their CAGRs. For SIP investments with multiple purchase dates, use XIRR in a spreadsheet or our SIP calculator for future value—this tool is best for a single purchase and single final value.

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