CAGR Calculator
Calculate the Compound Annual Growth Rate of any investment, or find the end value at a given CAGR.
CAGR calculator computes the Compound Annual Growth Rate of any investment. Enter the beginning value, ending value, and number of years to find the CAGR. Switch to the second mode to calculate what a lump sum grows to at a given CAGR over time. Useful for comparing mutual fund returns, stock portfolio performance, and business revenue growth. Free, no signup required.
CAGR
20.11%
per annum
Absolute return
150.00%
₹1,50,000
Frequently Asked Questions
- What is CAGR?
- CAGR stands for Compound Annual Growth Rate. It shows the annual rate needed to grow from a beginning value to an ending value over a fixed period. A ₹1 lakh investment that grows to ₹2.5 lakh in 5 years has a CAGR of about 20.1%.
- How is CAGR calculated?
- CAGR = (End Value / Begin Value)^(1 / Years) - 1. For ₹1 lakh growing to ₹2 lakh over 5 years: CAGR = 2^(1/5) - 1 = 14.87%. Multiply by 100 to express as a percentage.
- What is a good CAGR for a mutual fund?
- Large-cap equity mutual funds in India have delivered 10-13% CAGR over 10-year periods. Mid-cap funds have averaged 13-17% over the same period. Index funds tracking the Nifty 50 have returned around 11-13% over 10 years. Past CAGR does not guarantee future returns.
- What is the difference between CAGR and absolute return?
- Absolute return is the total percentage gain from start to end, regardless of time. CAGR adjusts for the time period and shows the equivalent annual growth rate. A 100% absolute return over 5 years equals a 14.87% CAGR. Over 10 years, the same 100% return gives only a 7.18% CAGR.
- How do I use CAGR to compare two investments?
- CAGR normalises returns by time period. Investment A that doubled in 3 years has a 26% CAGR. Investment B that tripled in 6 years has a 20.1% CAGR. The 3-year investment grew faster per year, even though B gave a larger absolute return in rupees.
- What will ₹1 lakh become in 10 years at 12% CAGR?
- ₹1 lakh at 12% CAGR for 10 years: End Value = 1,00,000 × (1.12)^10 = ₹3,10,585. Total gain is ₹2,10,585, a 210% absolute return over 10 years. Use the "Calculate End Value" mode in this tool to run similar projections for any combination of amount and rate.
What is CAGR Calculator?
CAGR calculator finds the Compound Annual Growth Rate of any investment or business metric. CAGR stands for Compound Annual Growth Rate. It shows the equivalent annual growth rate from a starting point to an ending point over any period.
Two modes are available. The first computes CAGR from known beginning and ending values. The second finds what a lump sum grows to at a given CAGR over time.
How does it work?
The formula is CAGR = (End Value / Begin Value)^(1 / Years) - 1. Expressed as a percentage, multiply the result by 100.
For ₹1 lakh growing to ₹4 lakh over 8 years: CAGR = 4^(1/8) - 1 = 18.92%.
The reverse formula is End Value = Begin Value × (1 + CAGR/100)^Years. Enter ₹1 lakh at 15% CAGR for 10 years to get ₹4,04,556. That is a 305% absolute return over the decade.
CAGR does not show volatility. An investment that dropped 40% in year 2 and recovered strongly might show the same CAGR as a steady grower. CAGR reflects only the start and end points.
CAGR Calculator in India
AMFI and mutual fund fact sheets in India report 1-year, 3-year, 5-year, and 10-year CAGR returns. Investors use these to compare funds over a common time horizon. A higher 10-year CAGR is not always better when achieved with significantly higher volatility.
SEBI mandates that mutual fund advertisements show CAGR for periods over one year. For periods up to one year, absolute returns must be shown. Using this distinction, a 35% absolute return over 8 months cannot be annualised and advertised as a 52.5% CAGR.
Revenue CAGR is a standard metric in startup pitch decks and annual reports. A company growing revenue from ₹10 crore to ₹80 crore over 5 years has a revenue CAGR of 51.5%. Investors and analysts compare CAGR across companies in the same sector to assess growth trajectory.
Nifty 50 CAGR over 20 years (2004-2024) is approximately 13-14% per annum including dividends. Gold has returned around 12% CAGR over the same period. Real estate returns vary widely by city and locality.
Tips to get the best results
- Use CAGR to compare investments of different durations. A 3-year and a 7-year investment can be placed on equal footing using their respective CAGRs.
- Always pair CAGR with standard deviation or drawdown data when evaluating equity investments. A higher CAGR with extreme volatility may not suit conservative investors.
- For SIP investments, CAGR does not apply directly. SIP returns are measured using XIRR, which accounts for cash flows at different time points. Use the SIP calculator for those projections.
- When comparing two mutual funds, check both 5-year and 10-year CAGRs. A high short-term CAGR with a low long-term CAGR often signals one exceptional year inflating the shorter number.
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