CAGR Calculator – Compound annual growth rate
CAGR stands for compound annual growth rate: the constant yearly pace that would take a starting balance to an ending balance over a fixed horizon, ignoring the path in between. Analysts sometimes apply the same idea to revenues or profits, but on MFReturns the inputs are framed for money you put in once and hypothetically redeem once.
It is useful when you already know (or assume) opening and closing values and want them on comparable annual footing. The figure is illustrative—not a substitute for analysing volatility, sequencing risk, taxes, fees, or many separate cashflows.
MFReturns expresses the result alongside the sliders below; duration can be tuned in half-year steps to match horizons that do not land on whole years.
How can a CAGR calculator help you?
Absolute return only tells you how much larger or smaller an amount became; CAGR folds in how long it took so you can talk about pace per year.
Unlike a fund factsheet that may quote several return windows, this tool answers a narrow question: “If growth were perfectly smooth, what yearly rate bridges my start and finish?” It ignores every zig-zag in between.
You might use it to sketch scenarios—different ending values, different horizons—or to communicate a quick annualised shorthand after a single inflow and a single hypothetical exit.
A CAGR result does not tell you volatility, maximum drawdown, or suitability. No single smoothed-rate widget replaces fuller risk assessment or professional advice.
How is CAGR calculated?
The calculator uses the standard three-input relationship (matching the Formula panel in this widget):
CAGR = (F / I)^(1/D) − 1
Where:
– F is the final investment value.
– I is the initial investment (present value).
– D is the elapsed time expressed in years (half-year increments supported in this UI).
Worked example: if you invested ₹1,00,000 and it grew to ₹10,00,000 over D = 5 years, then F/I = 10, so CAGR = 10^(1/5) − 1 ≈ 0.5849, roughly 58.49% per year under the smooth-compounding assumption.
Multiply the decimal by 100 to match how percentage rates are quoted in headlines. Small rounding differences can appear versus spreadsheet engines, but the structure is unchanged.
How to use this CAGR calculator
Open the MFReturns CAGR calculator (this page) and set three numbers with the sliders or by typing into the fields.
Enter your starting amount, your ending amount, and the duration in years (you can step by 0.5 years).
The layout updates as inputs change, showing the implied CAGR together with the gain or loss between start and finish.
Advantages of using this CAGR calculator
– Turn two balances and a horizon into one annualised figure you can compare across stories or time spans.
– Explore alternatives quickly without rebuilding a spreadsheet for every tweak.
– Keep expectations explicit: the maths assumes reinvestment at the same smooth rate, which real markets rarely deliver.
– Explore related MFReturns calculators such as SIP, lumpsum, and XIRR when your cashflows are more complex—they are grouped on the calculators overview page.
Where CAGR falls short
Volatility in between disappears in the smoothing; two paths with identical CAGR can feel wildly different emotionally.
If money moved in or out on many dates rather than as one starting lump and one ending value, use the XIRR calculator instead.
When the ending amount is below the starting amount, CAGR is negative—an overall loss expressed as an annualised rate.