What is CAGR?

CAGR stands for Compounded Annual Growth Rate, a metric commonly used to assess a business’s performance in a competitive market. It indicates the growth rate of an organization over a specified period. A CAGR calculator simplifies the process of determining this growth rate.

Although various online CAGR calculators are available, user-friendliness is crucial for accurate calculations. Our online CAGR calculator offers an organized and accurate method for calculating your business’s CAGR.

Benefits of Using a CAGR Calculator

For business owners, CAGR can reveal many overlooked factors. Unlike ‘absolute returns,’ CAGR considers the element of time, making it a better growth indicator over a period.

CAGR is an indicative figure, not a real one. It shows the exact growth rate of an investment assuming it grows at a consistent rate with reinvested returns. Monitoring CAGR is beneficial when considering different investment options.

A CAGR calculator helps you determine the true annual returns on investment, saving you time and resources as it is completely free.

With a CAGR calculator, you can determine:

• Whether your business is growing over time and if profits are being reinvested effectively.
• Evaluate your investment options. For example, if Stock A underperforms compared to Stock B based on their respective CAGR indices, you can choose to invest in Stock B.
• The relative growth of your business compared to market leaders in your sector.

Please note that no CAGR calculator in India will provide data on investment risk.

How to Calculate CAGR

The formula for calculating CAGR is:

CAGR = (FV / PV) ^ (1 / n) – 1

Where the values represent:

• FV: Future Value
• PV: Present Value
• N: Time period in years

Example of CAGR Calculation

If you invest Rs. 1 Lakh initially (PV), and it grows to Rs. 10 Lakh (FV) after 5 years (N), the CAGR is calculated as:

(10,00,000 / 1,00,000) ^ (1 / 5) – 1 or 0.589

Thus, the CAGR percentage is 58.9%.

Using the CAGR Calculator

You can use the Groww’s online CAGR calculator for free by following these steps:

1. Enter your initial investment amount.
2. Enter the expected value of the investment after a specific period.
3. Enter the number of years or months for which you want to calculate the CAGR.

The calculator will generate the results within seconds after you input the values.

Advantages of Using an Online CAGR Calculator

Our service offers several benefits:

• Provides a detailed outlook of your Return on Investment (ROI).
• If you are a potential investor, you can use our mutual fund CAGR calculator to determine the investment needed to maximize returns over time.
• Compare your business returns with benchmark options to evaluate performance.
• Plan long-term capital investments.
• Use a globally recognized financial platform for accurate results.

Feel free to explore other calculators available on our site. Our CAGR calculator is designed for safety, efficiency, and accuracy, helping you plan your future finances effectively.