CAGR Calculator - Free Online Calculator

Initial Value₹1,00,000

₹

Final Value₹2,00,000

₹

Time Period

yrs

150

CAGR

14.87%

Absolute Return

100.00%

Total Gain

₹1.00 L

What is a CAGR?

The CAGR Calculator helps you measure the Compound Annual Growth Rate of any investment — the single annualised rate at which your money grew from an initial value to a final value over a specified number of years. CAGR, or Compound Annual Growth Rate, is one of the most widely used metrics in investing because it accounts for the compounding of returns year-on-year, unlike simple percentage gain which ignores the time dimension entirely.

In India, CAGR is the standard benchmark reported by mutual funds, equity analysts, and stock market publications. When a fund factsheet states "15-year CAGR: 14.3%", it means the fund's NAV grew at a compounded rate of 14.3% every year over that period — regardless of how volatile individual years were. This smoothing effect is what makes CAGR so useful: it strips out year-to-year noise and gives you a single, comparable number.

The concept is closely related to Compound Interest, where interest earned in each period is added back to the principal and earns further interest. CAGR essentially expresses this compounding effect in reverse — starting from the end result and asking: at what consistent annual rate would this investment have grown?

CAGR is applicable to a wide range of assets in the Indian context:

Equity mutual funds — comparing performance across fund categories
Stocks — evaluating whether a company's share price has outpaced market benchmarks
Real estate — measuring property appreciation over a holding period
Fixed deposits and RDs — expressing effective annual returns when compounding frequency varies
Business revenue — tracking how fast a company or portfolio has grown year over year

This calculator also includes a reverse mode: enter your desired CAGR and investment amount, and it tells you the final value you need to reach — useful for setting realistic investment targets.

How to use this CAGR calculator

Enter your Initial Value — the amount you originally invested or the starting value of the asset. For a mutual fund, this is your purchase NAV multiplied by units, or the amount you invested in a lump sum. Typical lump sum investments in India range from ₹10,000 to several lakhs.
Enter your Final Value — the current or exit value of the investment. For a mutual fund, check the current NAV and multiply by units held. For a stock, use current market price multiplied by shares held.
Set the Time Period — the number of complete years between your initial investment and the final value date. Use the slider to quickly explore how CAGR changes with different holding periods. Note: CAGR assumes whole years; for partial years, results are an approximation.
Read the CAGR — the highlighted result is your annualised growth rate. Compare it against your target return, benchmark index CAGR, or FD rates to assess performance.
Check Absolute Return and Total Gain — use these to understand the full picture: total percentage profit and actual rupee gain.
Use Reverse Mode to set targets — toggle to reverse mode, enter your target CAGR and initial investment, and set the time horizon to see what final value you need to achieve. Use this when evaluating whether a real estate deal, startup investment, or alternative asset can realistically deliver your required return.

Formula & Methodology

Forward (Calculate CAGR):

CAGR = (FV ÷ IV)^(1 ÷ n) − 1

Where:
- FV = Final Value (maturity or exit value)
- IV = Initial Value (initial investment or starting value)
- n = Number of years (investment horizon)
- ^ = Exponentiation (raise to the power of)

Absolute Return = ((FV − IV) ÷ IV) × 100

Total Gain = FV − IV

Reverse (Calculate Target Final Value):

FV = IV × (1 + CAGR)ⁿ

This is simply the compound interest formula — CAGR and compound interest rate are mathematically equivalent when applied to a single lump sum. Compare this to Simple Interest where gains are linear rather than compounded.

Worked Example:

You invested ₹1,50,000 in an equity mutual fund 7 years ago. The current value is ₹4,20,000.

CAGR = (4,20,000 ÷ 1,50,000)^(1 ÷ 7) − 1
= (2.8)^0.1429 − 1
= 1.1583 − 1
= 15.83% p.a.

Absolute Return = ((4,20,000 − 1,50,000) ÷ 1,50,000) × 100 = 180%

Total Gain = 4,20,000 − 1,50,000 = ₹2,70,000

Reverse Example:

You want to know what ₹5,00,000 invested today must grow to in 10 years if you target 14% CAGR:

FV = 5,00,000 × (1 + 0.14)¹⁰ = 5,00,000 × 3.7072 = ₹18,53,600

Assumptions:
- CAGR assumes a single lump sum entry and a single exit — it does not apply to investments with multiple cash flows (use XIRR for SIPs)
- Years are treated as whole numbers; sub-year periods are approximations
- No adjustment is made for dividends, taxes, or transaction costs — the calculator works on raw values only
- All compounding is annual by convention of the CAGR formula

Frequently Asked Questions

What is CAGR and how is it different from simple return?

CAGR, or Compound Annual Growth Rate, measures the steady annual growth rate of an investment from its initial value to its final value over a given time period, assuming profits are reinvested. Simple return, by contrast, divides the total gain by the original investment without accounting for the compounding effect across years. For example, a 100% simple return over 10 years translates to only 7.18% CAGR — not 10% — because the growth is spread and compounded annually. CAGR gives a cleaner, comparable picture of investment performance.

What is the formula for CAGR?

The CAGR formula is: CAGR = (Final Value ÷ Initial Value)^(1 ÷ Number of Years) − 1, expressed as a percentage. For example, if ₹1,00,000 grew to ₹2,50,000 over 6 years, CAGR = (2,50,000 ÷ 1,00,000)^(1 ÷ 6) − 1 = (2.5)^0.1667 − 1 ≈ 16.5%. This formula smooths out volatility to give you a single annualised growth figure.

What is a good CAGR for mutual funds in India?

Equity mutual funds in India have historically delivered a CAGR of 12–15% over long periods of 10 years or more, while large-cap funds typically return 10–12% p.a. and small-cap funds have delivered 14–18% in favourable market cycles. Debt mutual funds generally offer 6–8% CAGR, close to fixed deposit rates. Any CAGR consistently above the benchmark index over 5+ years is considered strong performance for an actively managed fund.

What is the difference between CAGR and XIRR?

CAGR works when there is a single lump sum initial investment and a single final value — it assumes one entry point and one exit. XIRR (Extended Internal Rate of Return) is used when cash flows happen at irregular intervals, such as monthly SIP investments or multiple top-ups over time. For evaluating a SIP portfolio, XIRR is more accurate; for evaluating a one-time investment or benchmarking a fund's performance, CAGR is the standard metric.

What is the difference between CAGR and IRR?

IRR (Internal Rate of Return) and XIRR are essentially the same concept applied to irregular cash flows, while CAGR applies to a single starting and ending value. IRR calculates the discount rate that makes the net present value of all cash flows equal to zero, making it suitable for projects with multiple inflows and outflows. CAGR is simpler and is the standard way to express point-to-point investment growth in annual terms.

What is the difference between CAGR and absolute return?

Absolute return is the total percentage gain from initial value to final value — for example, doubling your money is a 100% absolute return regardless of how many years it took. CAGR breaks that total gain into an equivalent annual growth rate, making it comparable across investments with different time horizons. A 100% absolute return over 5 years is roughly 14.87% CAGR, while the same 100% return over 10 years is only about 7.18% CAGR.

How do I use the CAGR calculator to compare two investments?

Enter the initial value, final value, and investment duration for the first investment to get its CAGR. Then repeat the same for the second investment and compare the two CAGR figures directly, regardless of the different amounts or time periods involved. This makes the CAGR calculator a reliable benchmarking tool — for instance, comparing whether a particular stock delivered better annualised returns than a fixed deposit over the same holding period.

Can I calculate CAGR manually without a calculator?

Yes, using the formula CAGR = (FV ÷ IV)^(1 ÷ n) − 1. First divide the final value by the initial value, then raise that result to the power of (1 ÷ number of years) using a scientific calculator or Excel's POWER function, and subtract 1. For example, ₹50,000 growing to ₹1,20,000 in 7 years: (1,20,000 ÷ 50,000)^(1/7) − 1 = (2.4)^0.1429 − 1 ≈ 13.37% CAGR. The reverse calculation — finding a target final value for a desired CAGR — is handled by the reverse mode in this calculator.

Is CAGR applicable to SIP investments?

No — CAGR is not the right metric for SIP investments because SIPs involve multiple cash flows at regular intervals rather than a single lump sum. For SIPs, XIRR is the correct measure of annualised return. However, CAGR is appropriate for evaluating the historical performance of a mutual fund's NAV over a period, or for a one-time lump sum investment in a fund. Use our [SIP Calculator](/sip-calculator/) if you want to estimate returns on a systematic monthly investment plan.

What is the minimum investment period for CAGR to be meaningful in India?

CAGR becomes statistically meaningful for equity investments when calculated over at least 3–5 years, as shorter periods can be distorted by market volatility. SEBI mandates that mutual funds display CAGR for periods of 1 year, 3 years, 5 years, and since inception to give investors a reliable long-term picture. For debt instruments or fixed deposits, even a 1-year CAGR is comparable since returns are more stable.

How does the reverse mode in this CAGR calculator work?

The reverse mode lets you set a target CAGR and enter your initial investment amount and time horizon — the calculator then tells you what final value your investment must reach to achieve that growth rate. For example, if you invest ₹2,00,000 for 10 years and want 15% CAGR, the reverse mode calculates that your investment must grow to approximately ₹8,09,111. This is useful for setting investment benchmarks and evaluating whether a proposed deal or fund meets your return expectations.

Can CAGR be negative?

Yes, CAGR can be negative when an investment has lost value over the period. If you invested ₹1,00,000 and it is now worth ₹60,000 after 4 years, the CAGR would be approximately −11.84% p.a. A negative CAGR signals consistent value erosion and is a red flag for equity investments held over 5+ years, though short-term negative CAGR can occur in market downturns.