CAGR Calculator
Calculate Compound Annual Growth Rate (CAGR) for your investments. Compare stocks, mutual funds, and other assets with accurate growth metrics.
Quick Examples
Investment Details
Starting amount or investment value
Current or ending investment value
Time period of investment
Note: CAGR smooths out volatility and shows the average annual growth rate. It doesn't reflect the actual year-to-year fluctuations.
Compound Annual Growth Rate
0.00%
Your investment grew at 0.00% annually
Investment Metrics
CAGR vs Absolute Returns
Average annual growth rate considering compounding
Total percentage gain over 10 years
Why the difference? CAGR is annualized (per year rate), while absolute returns show total growth percentage. For 10 years at 0.00% CAGR = 0.00% total returns.
Year-by-Year Growth Projection
| Year | Value | Annual Growth | Total Growth % |
|---|
Reverse CAGR Calculators
What will my investment grow to?
What CAGR do I need to reach my goal?
Understanding CAGR
What is CAGR?
CAGR (Compound Annual Growth Rate) is the rate at which an investment would have grown if it had grown at a steady rate annually. It's one of the most accurate ways to calculate returns for individual assets or investment portfolios over time.
Formula: CAGR = [(Ending Value / Beginning Value)^(1/Number of Years)] - 1
CAGR vs Absolute Returns
- Absolute Returns: Total percentage gain/loss. Example: ₹1L to ₹2L = 100% absolute returns
- CAGR: Annualized return rate. Same ₹1L to ₹2L over 5 years = 14.87% CAGR
- Key Difference: CAGR tells you the average annual growth, making it easier to compare different investments
CAGR vs XIRR - When to Use Each?
- Use CAGR when: Single lump sum investment (one-time investment)
- Use XIRR when: Multiple investments at different times (SIP, irregular investments)
- Example: Bought stocks once in 2016 → Use CAGR. Monthly SIP in mutual fund → Use XIRR
- Why? CAGR assumes single investment; XIRR accounts for cash flow timing
Limitations of CAGR
- Doesn't show volatility: Two investments with same CAGR can have vastly different risk profiles
- Smooths out fluctuations: Doesn't reflect actual year-to-year performance variations
- Not suitable for irregular cash flows: Use XIRR/IRR for SIPs and multiple transactions
- Past performance: Historical CAGR doesn't guarantee future returns
Real-World Examples
Infosys Stock (1993-2023)
Investment: ₹10,000 in 1993 → Current Value: ~₹3.5 crore
CAGR: ~36% over 30 years (one of India's best wealth creators)
Gold (2000-2020)
Price: ₹4,500/10g in 2000 → ₹48,000/10g in 2020
CAGR: ~12% over 20 years (good hedge against inflation)
Sensex (1990-2024)
Value: 1,000 in 1990 → 72,000 in 2024
CAGR: ~13% over 34 years (power of long-term equity investing)
How Mutual Funds Use CAGR
Mutual funds report returns using CAGR for different time periods (1-year, 3-year, 5-year, 10-year). This helps investors compare fund performance standardized to annual returns.
- Large Cap Equity Funds: Typically 10-12% CAGR long-term
- Mid/Small Cap Funds: 12-15% CAGR (higher risk, higher returns)
- Debt Funds: 6-8% CAGR (lower risk, stable returns)
- Hybrid Funds: 8-10% CAGR (balanced risk-return)
When to Use CAGR Calculator
1. Stock Investment Performance
Calculate how well your stock investments have performed. Compare your portfolio CAGR against benchmark indices like Nifty or Sensex to see if you're beating the market.
2. Mutual Fund Comparison
Compare different mutual funds on an apples-to-apples basis. A fund showing 50% returns over 3 years (15% CAGR) is better than one showing 80% over 5 years (12.5% CAGR).
3. Business Revenue Growth
Track company revenue growth. A company growing from ₹10 crore to ₹50 crore revenue in 5 years has 38% revenue CAGR - indicating strong business performance.
4. Real Estate Appreciation
Calculate property value growth. A flat bought for ₹30 lakh in 2015 worth ₹60 lakh today has 9.6% CAGR - helping you decide if real estate was a good investment.
5. Salary Growth Over Career
Track career progression. Starting at ₹5 LPA and reaching ₹20 LPA in 10 years = 14.9% salary CAGR. Benchmark against industry standards (typically 8-12% for good growth).
Frequently Asked Questions
1. What is a good CAGR for stocks in India?
For equity investments, 12-15% CAGR is considered good long-term. Nifty 50 has historically delivered ~11-12% CAGR. Anything above 15% is excellent but comes with higher risk. Individual stocks can deliver 20%+ but also carry higher volatility.
2. Is 15% CAGR realistic for mutual funds?
Yes, but not guaranteed. Mid-cap and small-cap equity funds have delivered 15%+ CAGR over 10-15 year periods. However, they're volatile. Large-cap funds typically deliver 10-12% CAGR. Don't chase unrealistic returns - even 12% CAGR doubles your money in 6 years.
3. CAGR vs SIP returns - which is more accurate?
For SIP, use XIRR instead of CAGR. CAGR assumes a single investment, while SIP involves multiple investments over time. XIRR accounts for the timing of each investment. However, funds often show both - CAGR for point-to-point returns and XIRR for SIP returns.
4. Can CAGR be negative?
Yes, if your investment value has decreased. For example, ₹1 lakh invested becoming ₹80,000 over 5 years = -4.4% CAGR. This indicates consistent losses and helps you quantify underperformance. Time to reconsider that investment!
5. How to calculate CAGR for multiple investments?
Calculate portfolio CAGR: Add all initial investments as beginning value, add all current values as ending value, and use the time period from first investment. Alternatively, calculate XIRR which is more accurate for different investment timings.
6. Why is my CAGR lower than annual returns shown?
Because annual returns don't account for compounding the same way. If a fund shows 20% one year and -10% next year, simple average is 5%, but CAGR will be different (lower) because it accounts for the compounding effect of losses.
7. What's better - 20% CAGR over 3 years or 12% CAGR over 10 years?
Depends on sustainability. 12% CAGR over 10 years is more reliable and proven. 20% CAGR over 3 years might be a lucky streak. Warren Buffett's Berkshire Hathaway has delivered ~20% CAGR over 50+ years - that's exceptional. Consistency matters more than short-term high returns.
8. How does inflation affect CAGR?
Real CAGR = Nominal CAGR - Inflation Rate. If your investment delivered 12% CAGR but inflation was 6%, your real returns are only 6% CAGR. Always consider inflation-adjusted returns for true wealth creation. Your returns should beat inflation + FD rates.