CAGR Calculator
Calculate Compound Annual Growth Rate — measure your investment's annual return
About CAGR (Compound Annual Growth Rate)
- CAGR formula: CAGR = (Final Value / Initial Value)^(1/n) - 1, where n = number of years
- CAGR represents the annualized rate of return assuming consistent growth
- It smooths out volatility — doesn't reflect year-to-year fluctuations
- Absolute Return: (Final Value - Initial Value) / Initial Value × 100
- CAGR is better than absolute return for comparing investments over different time periods
- Usage: Compare mutual fund performance, stock returns, portfolio growth, business revenue growth
- CAGR does not account for intermediate cash flows (investments/withdrawals)
- For SIP returns, use XIRR (Extended Internal Rate of Return) instead of CAGR
About CAGR Calculator
The CAGR (Compound Annual Growth Rate) Calculator computes the annualized return on investment over a specified period. CAGR is the most accurate measure of investment performance as it smooths out volatility and provides a single growth rate that takes the investment from its beginning value to its ending value. The formula is: CAGR = (Ending Value / Beginning Value)^(1/n) - 1, where n is the number of years.
CAGR is essential for comparing different investments — mutual funds, stocks, real estate, or fixed deposits — on a level playing field. Unlike absolute returns, which don't account for time, or average returns, which ignore compounding, CAGR provides a true picture of annualized performance. Our calculator also computes the reverse — projecting future values based on a given CAGR, helping you set realistic investment goals for FY 2026-27 and beyond.
Key Features
- CAGR computation from beginning and ending values
- Future value projection based on CAGR
- Comparison of multiple investments
- Absolute and annualized return calculation
- Investment doubling time estimation
Frequently Asked Questions
What is a good CAGR for mutual funds in India?
A good CAGR for equity mutual funds in India is 12-15% over a 5+ year period. Large-cap funds typically deliver 10-13%, mid-cap funds 13-17%, and small-cap funds 15-20% CAGR over long periods. For debt funds, 6-8% CAGR is considered good. However, past CAGR doesn't guarantee future returns, and higher CAGR usually comes with higher risk and volatility.
How is CAGR different from absolute return?
Absolute return measures the total percentage change in value regardless of time — for example, a 100% gain over 10 years. CAGR annualizes this return — the same 100% over 10 years equals a 7.2% CAGR. CAGR accounts for the time value of money and compounding, making it superior for comparing investments of different durations. An absolute return of 50% in 1 year is excellent, but 50% in 10 years is poor — CAGR captures this difference.
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