CAGR Calculator — Compound Annual Growth Rate Calculator
Calculate CAGR of your investments or find future value at a given CAGR. See growth multiple, absolute returns, and year-wise value projection. Free CAGR calculator.
CAGR Calculator
Compound Annual Growth Rate
CAGR Results
CAGR
24.57%
Start Value
₹1,00,000
5 yrs
End Value
₹3,00,000
Absolute Returns
200.0%
Total Gain
₹2,00,000
Year-wise Growth
What is CAGR?
CAGR (Compound Annual Growth Rate) is the rate of return that an investment would need to grow from its beginning value to its ending value, assuming profits are reinvested each year. It smooths out the volatility of year-to-year returns to give a single growth rate.
CAGR is the most accurate way to compare investments across different time periods and asset classes. Unlike simple average returns, CAGR accounts for compounding.
CAGR vs Average Return
If a stock returns +50% in Year 1 and -50% in Year 2, the simple average is 0%. But ₹100 becomes ₹150, then ₹75 — an actual loss of 25%. CAGR correctly shows -13.4%, reflecting reality.
CAGR Formula
CAGR = (EV / BV)1/n - 1
Where:
- EV = Ending Value of the investment
- BV = Beginning Value of the investment
- n = Number of years
Benchmark CAGR (India)
- Nifty 50: ~12-14% (20-year CAGR)
- Sensex: ~12-13% (20-year CAGR)
- Gold: ~10-11% (20-year CAGR)
- Real Estate: ~8-10% (varies by city)
- FD: ~6-7% (varies by bank)
Frequently Asked Questions
What is a good CAGR for investments?
A good CAGR depends on the asset class. For equity mutual funds in India, 12-15% CAGR over 10+ years is considered good. For debt funds, 7-9% is good. For stocks, top-performing companies have delivered 15-25% CAGR. Always compare CAGR against inflation (5-6%) to get real returns.
What is the difference between CAGR and absolute returns?
Absolute return is the total percentage gain/loss from start to finish. CAGR converts this to an annualized rate. If ₹1 lakh becomes ₹3 lakh in 5 years, absolute return is 200%, but CAGR is 24.57%. CAGR is better for comparing investments across different time periods.
Can CAGR be used for SIP investments?
No, CAGR is for lump sum investments only. For SIP, use XIRR (Extended Internal Rate of Return) which considers the timing and amount of each cash flow. XIRR gives a more accurate return for periodic investments.
Does CAGR account for inflation?
No, standard CAGR is nominal (not adjusted for inflation). To get real CAGR, subtract the inflation rate. If CAGR is 12% and inflation is 6%, real CAGR is approximately 6%. Real CAGR better represents actual purchasing power growth.
What are the limitations of CAGR?
CAGR smooths out volatility, hiding year-to-year fluctuations. It doesn't show risk — two investments can have the same CAGR but very different risk levels. It also doesn't account for interim cash flows (dividends, additional investments).
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