Calculate Compound Annual Growth Rate (CAGR) for your investments. Compare returns across different time periods and investment amounts.
16/4/2026
Initial Investment
₹1,00,000
Final Value
₹2,50,000
CAGR
20.11%
Total Return
₹1,50,000 (150.00%)
| Year | Value (₹) | Absolute Return (₹) |
|---|---|---|
| 0 | ₹1,00,000 | ₹0 |
| 1 | ₹1,20,112 | ₹20,112 |
| 2 | ₹1,44,270 | ₹44,270 |
| 3 | ₹1,73,286 | ₹73,286 |
| 4 | ₹2,08,138 | ₹1,08,138 |
| 5 | ₹2,50,000 | ₹1,50,000 |
Formula Used:
CAGR = (Final Value / Initial Value)^(1/years) - 1CAGR represents the constant annual growth rate that would have produced the same final value if the investment grew at a steady rate each year.
Compound Annual Growth Rate (CAGR) is one of the most important metrics in finance and investing. It measures the mean annual growth rate of an investment over a specified period longer than one year. Unlike absolute returns, CAGR smooths out volatility and provides a clear picture of consistent performance. Our CAGR Calculator allows you to compute CAGR from initial and final values, or project future values given a CAGR. It also generates year-by-year growth tables and visual charts.
In this comprehensive guide, we'll explore the mathematics of CAGR, its applications in stock market, mutual funds, business growth, and real estate. We'll compare CAGR with other return metrics like absolute return, annualized return, and XIRR. We'll also answer frequently asked questions to help you master investment analysis.
CAGR (Compound Annual Growth Rate) is the rate at which an investment grows each year to reach a given ending value from a starting value, assuming profits are reinvested at the end of each year. It is a geometric average that accounts for compounding. For example, if an investment grows from ₹1,00,000 to ₹1,61,051 in 5 years, the CAGR is 10% – meaning it grew by exactly 10% each year to reach that final value.
CAGR = (Ending Value / Beginning Value)^(1 / Number of Years) - 1
Example: ₹1,00,000 invested for 5 years becomes ₹2,00,000.
CAGR = (2,00,000 / 1,00,000)^(1/5) - 1 = (2)^(0.2) - 1 = 1.1487 - 1 = 14.87%.
The calculator above does this instantly.
Absolute return tells you total profit but ignores time. A 50% return over 10 years (CAGR ~4.1%) is very different from 50% over 2 years (CAGR ~22.5%). CAGR allows fair comparison across investments with different time horizons. Mutual funds, stocks, and even business projects are best evaluated using CAGR.
- Assumes steady growth: Real investments have ups and downs. CAGR hides volatility.
- Ignores cash flows: For SIPs or periodic investments, use XIRR instead.
- Past performance ≠ future results: Historical CAGR does not guarantee future returns.
- No risk measure: Two investments with same CAGR can have vastly different risk profiles.
Use CAGR alongside metrics like Sharpe ratio, standard deviation, and maximum drawdown for full analysis.
- Absolute Return: (Final - Initial)/Initial × 100. Ignores time.
- Annualized Return: Absolute return divided by years. Ignores compounding.
- CAGR: Geometric mean, accounts for compounding. Most accurate for multi-year.
- XIRR: For irregular cash flows (SIP, additional investments, withdrawals).
For lump sum investments, CAGR is the standard.
Historically, Indian equity (Nifty 50) has delivered ~14-16% CAGR over 20+ years. Good mutual funds may show 15-18% CAGR. However, past performance is not guarantee.
Yes, if the final value is less than initial value. Negative CAGR indicates loss.
Average annual return is arithmetic mean (sum of yearly returns / years). CAGR is geometric mean. For volatile investments, average annual return overstates performance. CAGR is always lower or equal.
No, CAGR assumes a single lump sum. For SIP, use our SIP Calculator or XIRR.
It uses the exact CAGR formula. Results are mathematically precise.
IRR (Internal Rate of Return) handles multiple cash flows. CAGR is a special case of IRR with only one initial and one final cash flow.
Click the "Download PDF Report" button. The PDF includes all inputs, outputs, charts, and the year-by-year table.
Yes, enter years as decimal (e.g., 3.5 for 3.5 years). The formula works for any positive number.
Example 1 – Nifty 50: Invested ₹1,00,000 in Nifty in 2000 (value ~1,500) vs 2025 (value ~22,000). Final value = ₹14,66,666. CAGR = (14.67)^(1/25) - 1 = 11.5% approx.
Example 2 – Mutual Fund: Initial ₹5,00,000 in 2015, final ₹12,00,000 in 2025. CAGR = (12/5)^(1/10)-1 = 9.15% p.a.
Example 3 – Real Estate: Bought house for ₹50L in 2010, sold for ₹1.5Cr in 2025. CAGR = (3)^(1/15)-1 = 7.6% p.a.
Switch to "Calculate Future Value" mode. Enter your current corpus, expected CAGR (based on asset allocation), and years to goal. The calculator shows the projected final value. For retirement planning, assume 10-12% for equity-heavy portfolios, 8-10% for balanced, 6-8% for debt-heavy. Adjust CAGR to see how much you need to invest today.
CAGR is an indispensable tool for any serious investor. It cuts through the noise of market volatility and provides a clear annualized growth rate. By using our CAGR Calculator, you can evaluate past investments, compare options, and plan for the future with confidence.
Start using the CAGR Calculator above now. Enter your numbers, analyze the charts, and download your report. Remember – consistent compounding is the eighth wonder of the world!