CAGR Calculator
Find the compound annual growth rate between two values, work out what a value grows to at a given rate, or how many years it takes. Works for shares, mutual funds, sales or any other figure. Runs in your browser; nothing is uploaded.
A worked example
Say ₹1,00,000 grows to ₹2,50,000 over 5 years. The multiple is 2.5, so the CAGR is 2.5^(1 ÷ 5) − 1 = 20.11% a year. That is not the 30% a year you would get by dividing the 150% gain by 5, because each year's growth builds on the year before. At 20.11% a year the value doubles in ln 2 ÷ ln 1.2011 = 3.78 years.
Understanding the calculation
- The formula
- CAGR = (ending value ÷ starting value) raised to the power of 1 ÷ years, minus 1. It is the single yearly rate that would take the starting value to the ending value if growth were smooth.
- Years from dates
- When you give two dates, the years are the number of days between them divided by 365, the same convention as the XIRR calculator.
- Doubling time
- The years to double at that rate, ln 2 ÷ ln (1 + CAGR). The rule of 72 gives a quick estimate by dividing 72 by the rate as a whole number.
- What it ignores
- The path taken: a figure that fell and recovered has the same CAGR as one that grew smoothly. It also ignores extra money added or taken out along the way, charges and tax. For a series of investments on different dates, use XIRR.
Common questions
What is CAGR?
CAGR is the compound annual growth rate: the single yearly rate that would take a starting value to an ending value over a period if it grew smoothly, with each year's growth added to the base for the next.
How is CAGR different from the average annual return?
An average of yearly returns ignores compounding. A figure that gains 50% one year and loses 50% the next has an average return of 0% but ends 25% lower, and its CAGR is about -13.4% a year.
When should I use XIRR instead of CAGR?
CAGR assumes one starting amount and one ending value. If money went in or out on several dates, as with a SIP, XIRR is the right measure, and the XIRR calculator on this site handles it.
How are dates turned into years?
The number of days between the two dates is divided by 365, the same convention as the XIRR calculator and the spreadsheet XIRR function.
Can CAGR be negative?
Yes. If the ending value is below the starting value, the CAGR is negative. The doubling time is then not defined and is left out.
Does CAGR include dividends, charges or tax?
No. It only uses the two values you enter. If you want a return that includes dividends, add them into the ending value, and deduct charges and tax yourself.
What is the rule of 72?
It is a shortcut for the years to double: divide 72 by the yearly growth rate as a whole number. At 12% a year that gives 6 years, and the exact figure is 6.12 years.