CAGR Calculator
Calculate the Compound Annual Growth Rate of any investment. CAGR shows you the smoothed annual return, eliminating year-to-year volatility.
CAGR
20.11%
per annum
Absolute Return
150.0%
total
Your investment grew from ₹1.00 L to ₹2.50 L at 20.11% CAGR over 5 years
Frequently Asked Questions
What is CAGR?
CAGR (Compound Annual Growth Rate) represents the smoothed annual rate at which an investment grows. Formula: CAGR = (Final Value / Initial Value)^(1/Years) - 1. It eliminates year-to-year volatility to show a consistent growth rate.
What is the difference between CAGR and absolute return?
Absolute return shows total percentage growth regardless of time (e.g., 150% in 5 years), while CAGR shows annualized growth (e.g., 20% per year). CAGR is better for comparing investments over different time periods.
What is a good CAGR in India?
In Indian markets: 7-8% for FDs/debt funds, 12-14% for Nifty 50/large-cap, 15-20% for mid-cap, 18-25% for small-cap over 10+ year periods. Anything above 15% CAGR over 5+ years is considered excellent.
How to calculate CAGR of a mutual fund?
Use the formula: CAGR = (Current NAV / NAV at purchase)^(1/years) - 1. Example: NAV grew from ₹100 to ₹250 in 5 years → CAGR = (250/100)^(1/5) - 1 = 20.11% per annum. Or simply use our calculator above.
How to Use This CAGR Calculator
Enter your initial investment value, the final value after growth, and the number of years the investment was held. The calculator computes the annualized growth rate, helping you compare returns across different assets and time periods.
Common Use Cases
- Comparing mutual fund performance across different periods
- Evaluating stock portfolio growth vs benchmark (Nifty 50)
- Analyzing real estate appreciation over years
- Measuring business revenue growth rate
Understanding CAGR Limitations
CAGR smooths out volatility and shows a straight-line growth rate, which means it doesn't reflect the actual year-to-year fluctuations. A fund showing 15% CAGR may have had years of -20% and +40%. Always look at rolling returns (1Y, 3Y, 5Y) alongside CAGR for a complete picture. CAGR is most useful for comparing investments over the same time period.