Compounding and CAGR calculator
See how capital grows when returns compound, or work out the CAGR between two values.
Compound growth
Compounding means each period’s return is earned on the amount you already have, including earlier gains. The calculator applies one rate per period, so it works for monthly returns, yearly returns or a per-trade return.
₹1,00,000 growing at 1% a month for 36 months becomes about ₹1,43,077, a 43% gain, compared with 36% from simple interest. The difference grows with time: over 120 months the same rate gives about ₹3,30,039.
CAGR
Compound annual growth rate (CAGR) is the steady yearly rate that would turn a starting value into an ending value over a number of years. It smooths out the ups and downs in between.
An investment that grows from ₹1,00,000 to ₹2,50,000 in 5 years has a CAGR of about 20.11%, even though the total return is 150%.
Small differences, big gaps
| Yearly return | ₹1 lakh after 10 years | after 20 years |
|---|---|---|
| 8% | ₹2,15,892 | ₹4,66,096 |
| 10% | ₹2,59,374 | ₹6,72,750 |
| 12% | ₹3,10,585 | ₹9,64,629 |
| 15% | ₹4,04,556 | ₹16,36,654 |
Why trading returns rarely compound smoothly
Real returns vary, and losses hurt more than equal gains help: a 20% loss needs a 25% gain to recover. Charges and taxes also reduce what compounds. Treat a steady monthly return in this calculator as an illustration, not a forecast.
For monthly investing in mutual funds, use the SIP calculator, which handles monthly instalments and annual step-ups.
Frequently asked questions
How do I calculate compound interest on trading capital?
Multiply the starting amount by (1 + return per period) raised to the number of periods. With ₹1,00,000 at 1% a month for 36 months, that is 1,00,000 × 1.01³⁶ ≈ ₹1,43,077.
What is CAGR?
CAGR is the constant yearly growth rate that links a starting value to an ending value over a period. It is calculated as (end ÷ start)^(1/years) − 1.
Is CAGR the same as average return?
No. A simple average of yearly returns overstates growth when returns vary. CAGR gives the single rate that matches the actual start and end values.
Can I use this for monthly SIPs?
You can use the "add each period" field, but the SIP calculator is better suited because it models monthly instalments made at the start of each month and annual step-ups.
