CAGR Calculator
Measure True
Investment Growth
Compound Annual Growth Rate tells you exactly how fast your investment grew annually, smoothing out all volatility. The investor's single most important metric.
CAGR Calculator
Find your investment's true annual growth rate
| Year | Value at CAGR | Annual Gain | Cumulative Gain | Absolute Return |
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Reverse CAGR Calculator
What final value will you get at a target CAGR?
CAGR Benchmarks
Compare your returns to leading asset classes
CAGR Complete Guide
Master the most important return metric in investing
What is CAGR?
CAGR (Compound Annual Growth Rate) is the rate at which an investment grows from its beginning value to ending value, assuming profits are reinvested each year. It smooths out volatility to show a single, consistent annual growth rate.
CAGR vs Absolute Return
- Absolute Return: (Final-Initial)/Initial × 100% — ignores time
- CAGR: Annualizes the return — time-adjusted comparison
- Example: 100% absolute return in 2yr = 41.4% CAGR
- 100% absolute return in 10yr = 7.2% CAGR
- Always use CAGR to compare investments of different durations
Limitations of CAGR
- Assumes smooth growth — ignores actual volatility year by year
- Doesn't account for additional investments or withdrawals
- For SIP returns, use XIRR instead of CAGR
- Two investments with same CAGR may have different risk profiles
- Always check volatility (standard deviation) alongside CAGR
CAGR vs XIRR
- CAGR: For lumpsum investments (single initial amount)
- XIRR: For SIP/multiple cash flows at different dates
- Mutual fund factsheets show CAGR (lumpsum) returns
- Your SIP returns shown in portfolio = XIRR
- Both matter — CAGR for fund quality, XIRR for your actual return
Find Initial Value
Your purchase price or NAV on investment date
Get Current/Final Value
Current market value or redemption value
Count the Years
Exact number of years (can be decimal like 3.5)
Apply Formula
(Final/Initial)^(1/Years) - 1 = CAGR
CAGR Pro Tips
How smart investors use CAGR to make better decisions
Inflation CAGR is Your Real Benchmark
India's CPI inflation averages 6% CAGR. If your investment CAGR is below 6%, you're actually losing purchasing power. Your real goal: CAGR > Inflation + Tax rate.
Compare Funds Using 5yr and 10yr CAGR
Always check both 5-year and 10-year CAGR before choosing a mutual fund. A fund with high 1-year CAGR may be a lucky streak. Consistent 10-year CAGR of 15%+ is truly excellent fund management.
Use XIRR for SIP — Not CAGR
CAGR only works for lumpsum. If you've been doing SIP, your actual return is the XIRR (Extended Internal Rate of Return). Most portfolio apps show this correctly. Don't compare SIP XIRR with fund CAGR directly.
Rule of 72 Uses CAGR Directly
To estimate doubling time: 72 ÷ CAGR = Years to double. At 12% CAGR, money doubles in 6 years. At 15% CAGR, doubles in ~5 years. This quick mental math helps you instantly judge any investment's power.
Alpha = Your Fund's CAGR Minus Benchmark CAGR
If Nifty gave 15% CAGR and your fund gave 18% CAGR, the fund generated +3% alpha. This is the fund manager's true value-add. Good alpha: 2–3%+. Negative alpha means index funds would have done better.
The Power of Small CAGR Differences
Over 20 years, the difference between 12% and 15% CAGR is staggering. ₹1L at 12% = ₹9.6L. ₹1L at 15% = ₹16.4L. That 3% difference = 71% more wealth over 20 years!
Frequently Asked Questions
All your compound annual growth rate questions answered
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