Gains Calculator
Understanding CAGR (Compound Annual Growth Rate)
The CAGR Calculator is a valuable tool for investors and business owners to evaluate the average annual growth of their investments over a defined period. CAGR, or Compound Annual Growth Rate, provides a smooth annual growth rate assuming profits are reinvested, making it more accurate than simple return metrics.
Unlike absolute returns, CAGR accounts for the time factor, helping users see the consistent growth rate over multiple years, even if year-on-year returns were volatile.
Why Use a CAGR Calculator?
- Accurate Return Evaluation: Understand the real growth rate of your investments over time.
- Compare Investments: Use CAGR to evaluate performance across mutual funds, stocks, or businesses.
- Time-Saving: Quick, accurate online calculations without needing complex formulas.
- Financial Planning: Track long-term returns and plan your investment goals better.
CAGR Formula
The CAGR formula used by this calculator is:
CAGR = (Final Value / Initial Value)1 / n – 1
Where:
- Initial Value (PV): Starting value of the investment
- Final Value (FV): Value at the end of the investment period
- n: Number of years
For example, if ₹1,00,000 grows to ₹10,00,000 in 5 years, the CAGR is approximately 58.49%.
How the CAGR Calculator Works
The calculator needs just three inputs:
- Initial Investment Amount
- Final Investment Value
- Investment Duration (Years)
Based on these, the calculator instantly returns the CAGR, which tells you the average rate of return per year over the selected time frame.
Benefits of Using a CAGR Calculator
- Investment Insight: Get a clearer understanding of how fast your money is growing.
- Plan Future Goals: Estimate how much your money needs to grow to reach a target amount.
- Compare Easily: Benchmark different mutual funds, stocks, or business revenues.
- Free & Accurate: Available online with real-time calculation — no manual work needed.
Example CAGR Calculation
| Initial Value | Final Value | Duration | Calculated CAGR |
|---|---|---|---|
| ₹1,00,000 | ₹10,00,000 | 5 Years | 58.49% |
Use this CAGR calculator to analyze mutual fund returns, business revenue growth, or stock investments over time.