Estimation is very important and integral part of software development life cycle. Without estimation of effort, duration and cost, software cannot be developed. It is important to do accurate estimation as much as possible. Today in Information technology Industry Estimation in agile software development is mostly based on heuristic approaches like expert judgment and planning poker. In absence of agile experts, it is very difficult to estimate in agile software development. There is need of a algorithmic method in agile software development which can do accurate estimates. In this paper, we propose a simple algorithmic estimation method for agile software development and compare the results given by proposed method to check the feasibility of algorithmic method in real time.