How to use this calculator?
Suppose you invested ₹1,00,000 in a mutual fund, and after 6 years, it has grown to ₹2,00,000. To find out what annual return (CAGR) you earned over those 6 years, enter the following:
- Initial Investment (Beginning Value): ₹1,00,000
- Final Value: ₹2,00,000
- Investment Duration: 6 years
The calculator will instantly show your **Compound Annual Growth Rate (CAGR)** — the average yearly return your investment earned during the specified period.
This is helpful when you want to assess the performance of a mutual fund or compare returns across different investment options over time.
CAGR calculator
This calculator helps you measure the **average annual return** earned by your investment over a specific time period, assuming compounding. It’s a useful metric to evaluate the performance of mutual funds, stocks, or any asset that grows over multiple years.
Formula used in this Calculator? With explanation
The calculator uses the standard CAGR formula:
CAGR = (Final Value / Beginning Value)1 / n – 1
- Beginning Value: Your initial investment
- Final Value: The amount you received at the end of the period
- n: Number of years the investment was held
This formula smooths out the returns over the entire investment period, ignoring short-term volatility. The result is expressed as a percentage and reflects your average annual growth rate.
Understanding the benefits:
CAGR is a powerful tool for long-term investors. It shows how consistently an investment has grown over time — as if it grew at the same rate every year. This makes it easier to compare various mutual funds, stocks, or portfolio returns, regardless of market ups and downs.
Unlike absolute return, which just compares starting and ending value, CAGR takes the time factor into account — making it more meaningful for goal-based or multi-year investments.
However, CAGR doesn’t show the full picture — it hides interim volatility. So while it’s great for comparison, always combine it with other metrics like standard deviation or rolling returns. For deeper analysis, consider consulting a qualified financial advisor.
Disclaimer:
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