# CAGR Calculator

> Find the constant yearly return that turns one value into another over a number of years.

https://laganisaathi.com/calculators/cagr.md

## Formula

**CAGR** = (final ÷ initial) ^ (1 ÷ years) − 1, expressed as a percentage

## What it is for

CAGR restates a total return as the constant yearly rate that would have
produced it. That makes two investments of different sizes and durations
comparable, which is why it is how NEPSE index and long-horizon share
performance is usually quoted.

It is not a rate you can project forward, and it hides the path: a CAGR of 12%
could be smooth or violent.

## Worked example

Rs 1,00,000 growing to Rs 2,00,000 over 5 years:

- final ÷ initial = 2
- **CAGR = 14.87% a year**

## Reading a NEPSE CAGR

Compare a scrip or index CAGR over a full market cycle rather than one or two
years, since a single year's return can carry the whole figure. When comparing
against an alternative, use the same period and the same start and end dates.

## Related

- [SIP calculator](https://laganisaathi.com/calculators/sip)
- [NEPSE share issues](https://laganisaathi.com/nepal-share-issues)