CAGR Calculator
Compound annual growth rate between any two values.
₹1 L that became ₹2 L over 5 years grew at 14.87% per year — a 2.00x multiple, or 100.00% total growth.
CAGR — compound annual growth rate — is the single constant yearly rate that would take an investment from its starting value to its ending value over a given period. It is the standard way to compare a stock, mutual fund, property or business against any other, because it converts total growth into a per-year figure. Enter three numbers above to get it.
The formula is CAGR = ((final ÷ initial)^(1 ÷ years) − 1) × 100. This calculator also shows the absolute point-to-point growth and the money multiple, so you can see at a glance how a large-sounding total return translates into an unremarkable annual one — or the other way round.
How is CAGR calculated?
Start with the ratio of final value to initial value, take its n-th root where n is the number of years, subtract 1 and multiply by 100: CAGR = ((FV ÷ PV)^(1/t) − 1) × 100. Taking the root is what annualises the growth; subtracting 1 strips out the original capital so you are left with the growth rate alone.
For example, ₹1,00,000 that becomes ₹2,00,000 in 5 years has a ratio of 2.00, and 2^(1/5) = 1.1487, so the CAGR is 14.87% a year. Notice how different that is from the headline: the absolute growth is 100% and the money multiple is 2.00x, but the annual rate is under 15%. Over 10 years instead of 5, ₹1,00,000 growing to ₹3,10,585 — a 210.59% total gain and a 3.11x multiple — works out to exactly 12.00% CAGR.
How to use this calculator
- Enter the initial value — your purchase price, opening NAV value or the business revenue in the first year.
- Enter the final value on the date you are measuring to, including any bonus or split-adjusted units.
- Set the holding period in years; use the number of years between the two dates, not the number of instalments.
- Read the CAGR for the annualised rate, total growth for the point-to-point return and the multiple for a quick sanity check.
- Compare the CAGR against a benchmark for the same window — a Nifty 50 index fund, an FD rate, or inflation — rather than judging it in isolation.
CAGR vs absolute return vs XIRR
Absolute return tells you how much you made in total but says nothing about time — 100% is excellent over 5 years and mediocre over 20, and CAGR is what separates the two. CAGR, however, only works for a single investment made once and redeemed once. The moment there are multiple cash flows on different dates — a SIP, top-ups, partial withdrawals — you need XIRR, which discounts every cash flow by its own date and is what your mutual fund statement reports for SIP investors.
The other thing to remember is that CAGR is a smoothed, backward-looking number. It describes the two endpoints and ignores everything in between: a fund that returned 60% in year one and lost 30% in year two shows the same CAGR as one that gained a steady 6% each year, yet the experience of holding them is completely different. CAGR hides volatility, drawdowns and sequence-of-returns risk, and it is highly sensitive to the endpoints you pick — measuring from a market bottom to a market peak flatters any asset. Use it alongside a look at the worst year, and never assume a past CAGR will repeat.
Frequently asked questions
What is a good CAGR for an investment?
It depends entirely on the asset class and the period. Indian equity indices have delivered roughly 11–13% CAGR over long horizons, debt funds and FDs around 6–8%, and gold something in between. A good CAGR is one that beats the relevant benchmark and inflation for the risk you took, not a fixed number.
What is the difference between CAGR and absolute return?
Absolute return is the total point-to-point gain, ignoring how long the money was invested, while CAGR converts that gain into an equivalent yearly rate. Doubling your money is 100% absolute return either way, but that is 14.87% CAGR over 5 years and only 7.18% over 10.
When should I use XIRR instead of CAGR?
Use XIRR whenever money went in or came out on more than one date — SIPs, lump-sum top-ups, partial redemptions or dividends. CAGR assumes one investment at the start and one value at the end, so applying it to a SIP will overstate or understate your true return depending on when the instalments landed.
Can CAGR be negative?
Yes. If the final value is lower than the initial value, the ratio is below 1 and the CAGR comes out negative, showing the average annual rate of decline. A stock that fell from ₹1,00,000 to ₹50,000 over 5 years has a CAGR of about −12.94% a year.
Does CAGR account for volatility or risk?
No, and this is its biggest blind spot. CAGR only looks at the first and last values, so a wildly volatile investment and a perfectly steady one can report identical CAGRs. Always pair it with a look at the worst calendar year, the maximum drawdown, or standard deviation before judging an investment.
Can I use CAGR to compare a fund with an FD?
Yes, and that is exactly what it is for — CAGR puts everything on the same annualised footing. Just compare over the same period and remember the FD number is guaranteed while the fund number is a realised past result that carries no promise about the future.
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Disclaimer: results are estimates based on the inputs and published rules/rates, for information only — not investment, tax or legal advice. Verify important decisions with a qualified professional. See our full disclaimer.