CAGR Calculator: Investment Return & Annual Growth Rate

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Quick answer

Enter your initial investment, its final value and the holding period in years. The tool returns the total gain in money, the total return as a percentage of what you put in, and the CAGR (compound annual growth rate): the steady yearly rate that would have grown the start value into the end value. It measures a single lump sum and is shown before tax, fees and inflation.

What the Investment Return Calculator does

This calculator works backwards from a result. You know what an investment was worth at the start and what it is worth now, and it tells you the annual rate that connects the two. The main figure is the CAGR, shown next to the absolute gain and the cumulative total return.

Use it when you have one lump sum with a start and finish value and want a single yearly number to compare. A stock, a mutual fund and a fixed deposit can then sit on the same scale, even if they ran for different lengths of time.

How it works

Type in the initial amount, the final value and the number of years held. The defaults are 1,00,000 growing to 1,80,000 over 5 years.

Total gain is final minus initial. Total return divides that gain by the initial amount. CAGR raises the ratio of final to initial to the power of one divided by the years, subtracts one and shows the result as a percentage.

Your browser recalculates as you type, and none of your figures are uploaded.

Methodology

Find the total gain. Subtract the initial value from the final value.
Find the total return. Divide the gain by the initial value and express it as a percentage.
Take the growth ratio. Divide the final value by the initial value.
Annualise into CAGR. Raise that ratio to the power of one divided by the number of years, subtract one, and multiply by 100.

CAGR (compound annual growth rate)

CAGR = (Final ÷ Initial) ^ (1 ÷ Years) − 1
Total return = (Final − Initial) ÷ Initial

Worked examples
1,00,000 grows to 1,80,000 over 5 years: (1.8) ^ (1 ÷ 5) − 1 = 12.47% CAGR, on a total return of 80.0%.
10,000 grows to 25,000 over 8 years: (2.5) ^ (1 ÷ 8) − 1 = 12.14% CAGR, on a total return of 150.0%.

As totals, 80% over five years and 150% over eight look very different. As annual rates they are almost the same, about 12%, which is the comparison CAGR makes possible.

Assumptions

A single lump sum invested once at the start and held to the end, with no further deposits or withdrawals. For monthly investing, use the SIP calculator.
Returns are treated as reinvested and compounding, since CAGR is a compounding measure by definition.
Figures are nominal and gross. Inflation, income tax, brokerage, fund expense ratios and exit loads are not deducted.
The initial value must be greater than zero. If the final value is below the initial value, the CAGR is negative, which is a real annualised loss.

Technical details

Headline metric	CAGR (annualised %)
Also shows	Total gain, total return (%)
Inputs	Initial value, final value, years
Year handling	Whole or fractional years
Rounding	CAGR 2 decimals, total return 1 decimal
Processing	In your browser; figures are not uploaded

Standards and references

CAGR is a geometric mean: CAGR is the geometric mean of the yearly returns (the nth root of total growth), not their arithmetic average.
It smooths volatility: It reports one steady rate that ends at the same value as the real, uneven year-by-year path.

Accuracy and limits

CAGR smooths volatility. It gives the constant rate that would produce the same end value, but the real path almost certainly had up years and down years, and two investments with the same CAGR can carry very different risk.

Because CAGR is a geometric mean, it comes out lower than the simple average of the yearly returns whenever those returns vary. The gap, often called volatility drag, widens as returns swing more, and the two match only if every year returned exactly the same.

It ignores the timing of money added or taken out along the way. If cash moved in or out mid-period, a CAGR on the raw start and end values misstates what you actually earned; a money-weighted return such as XIRR handles that.

Results are nominal. With 6% inflation, a 12% CAGR is closer to 6% in real purchasing power.

Real-world uses

Compare investments on one scale

Put a stock, a fund and an FD on the same annual footing so a five-year result and an eight-year result can be compared directly.

Sense-check a past return

Doubling your money in six years works out to about 12.2% a year, which you can then weigh against a benchmark.

Back out an implied rate

If you know the start and end value but not the rate, this solves for the rate you would feed into a compound interest calculator.

Measure business growth

Apply CAGR to revenue, users or any quantity that grew from one figure to another over a number of years.

When it fits, and when it doesn't

Good for

A single lump sum with a known start value, end value and holding period
Comparing investments of different lengths on one annual rate
Quick growth rates for revenue, users or any metric that compounds

Not the best choice for

Regular monthly investing, where ongoing contributions break the lump-sum assumption
Portfolios with deposits or withdrawals mid-period (use XIRR or IRR)
Judging risk, since CAGR hides the volatility along the way

For monthly investing, use the SIP calculator. To project a future value from a known rate, use the compound interest calculator, and for a fixed deposit, the FD calculator.

Frequently asked questions

What does this calculator measure?

It measures CAGR, the compound annual growth rate: the steady yearly rate that links your starting value to your final value. It also shows the absolute gain and the cumulative total return over the whole period.

What is CAGR in plain terms?

It is the constant annual rate that would have grown your initial amount into the final amount, compounding once a year. Real investments rarely grow that evenly, so CAGR is the smooth equivalent of a bumpy ride.

Why is CAGR lower than my average yearly return?

CAGR is a geometric mean, and when yearly returns vary the geometric mean is always lower than the simple average. A 50% gain followed by a 50% loss averages 0% but leaves you down 25%. CAGR reflects that; a simple average does not.

Does it work if I lost money?

Yes. If the final value is below the initial value, the CAGR is negative and shows the annualised rate of loss. The formula treats gains and losses the same way.

Can I enter fractional years?

Yes. Type something like 2.5 years and the calculator annualises over that exact period.

Does it account for my monthly SIP contributions?

No. It assumes one amount invested at the start. For regular monthly investing, where you add money over time, use the SIP calculator.

Is the result before or after tax and inflation?

Before both. The CAGR is nominal and gross, so subtract inflation for your real return and account for tax and fees separately.

What is the difference between total return and CAGR?

Total return is the cumulative percentage gain over the whole period, 80% in the default example. CAGR turns that into a per-year rate, about 12.5%, so periods of different lengths can be compared.

How is this different from a compound interest calculator?

A compound interest calculator goes forward: you give it a rate and it projects a future value. This one goes backward: you give it the start and end values and it solves for the rate between them.

Why do two very different totals show almost the same CAGR?

The periods differ. A larger total earned over more years can work out to the same annual rate as a smaller total earned over fewer years, and annualising is what lets you compare them fairly.

Does my data leave my device?

No. Your browser runs the calculation and sends nothing to a server.

Can I use it for business or revenue growth?

Yes. CAGR applies to any quantity that grows from one value to another over a known number of years, such as revenue, subscribers, traffic or units.

References

CAGR here is the standard geometric-mean formula (final over initial, to the power of one over years), the same definition finance textbooks and fund factsheets use. It is a smoothed annual rate and says nothing about any single year.

SIP Calculator

Estimate what a monthly SIP could grow to: the future value of a regular investment, in rupees, recalculated as you type.