CAGR Calculator
Calculate the Compound Annual Growth Rate of any investment instantly. Compare fund performance, evaluate portfolio returns, and benchmark against Nifty — with a clear yearly growth illustration.
CAGR Calculator
Calculate Compound Annual Growth Rate — how fast any investment has grown or needs to grow per year.
About CAGR Calculator
CAGR (Compound Annual Growth Rate) is the rate at which an investment would have grown if it grew at a steady rate every year. It is the most widely used metric for comparing investment performance across different time periods because it converts volatile, year-to-year returns into a single representative annual growth rate. Without CAGR, comparing a mutual fund that grew 200% over 10 years with one that grew 80% over 5 years would be misleading — CAGR makes these directly comparable.
The CAGR formula is: <strong>CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) − 1</strong>. For example, if ₹1 lakh grew to ₹2.5 lakh over 8 years: CAGR = (2,50,000 ÷ 1,00,000)^(1/8) − 1 = (2.5)^0.125 − 1 = 1.121 − 1 = 12.1% per year. This means, on average, the investment grew by 12.1% every year — even if actual annual returns varied from −15% to +40% year-to-year.
CAGR is used across Indian investing contexts. Mutual fund factsheets report 1-year, 3-year, 5-year, and 10-year CAGR for both the fund and its benchmark. Stock investors calculate CAGR of their portfolio or individual holdings to compare with Nifty CAGR and assess whether stock picking is adding value over index investing. Business analysts use revenue CAGR to assess company growth trajectories.
An important limitation of CAGR is that it does not reveal volatility or the path of returns. A mutual fund with 12% CAGR could have achieved this through smooth year-on-year growth or through volatile swings (−30% one year, +50% the next). Two funds with identical 12% CAGR over 10 years can have very different risk profiles. This is why CAGR should always be evaluated alongside metrics like maximum drawdown and standard deviation when assessing investment quality.
How to Use the CAGR Calculator
Enter the initial value — the starting investment amount (e.g., ₹1,00,000 NAV of a fund or portfolio value at purchase).
Enter the final value — the current or ending value of the investment.
Set the number of years — the exact period between the two values. You can enter partial years (e.g., 7.5 years) for precise calculation.
View CAGR result — the calculator shows annual growth rate, absolute return percentage, and illustrative growth of a ₹1 lakh investment at this CAGR.
Compare with benchmarks — Nifty 50 CAGR over 15 years is approximately 12–14%. Use this as a reference to evaluate whether your investment justifies the risk taken.
Pro Tips
A fund delivering 14% CAGR sounds excellent — until you realise its benchmark Nifty 50 Midcap 150 returned 17% CAGR in the same period. Outperformance of benchmark (alpha) is the true measure of a fund manager's skill. CAGR alone without benchmark comparison is misleading.
1-year CAGR is meaningless for equity — a single good or bad year distorts the picture entirely. Use 5-year CAGR as minimum for any equity fund or stock evaluation. For assessing a long-term investment strategy, 10-year CAGR that has included at least one market crash is the most meaningful.
The arithmetic average of annual returns is always higher than CAGR. If a fund returns +50% and −33%, arithmetic average is +8.5% but CAGR is 0% (because ₹100 × 1.5 × 0.67 = ₹100). This is why CAGR is the correct metric — it shows the actual compounded growth, not the misleading arithmetic average.
Frequently Asked Questions
What is a good CAGR for stocks in India?
Nifty 50 has delivered approximately 12–14% CAGR over 15-20 year periods. Well-managed diversified equity mutual funds (large-cap and flexi-cap) target 12–16% CAGR. Mid-cap and small-cap funds have historically delivered 16–22% CAGR with higher volatility. Individual stocks can show much higher CAGRs, but past performance never guarantees future results.
What is the difference between CAGR and absolute returns?
Absolute return = ((Final Value − Initial Value) ÷ Initial Value) × 100. It shows total growth without considering time. CAGR annualises this, enabling time-adjusted comparison. A 100% absolute return over 10 years = just 7.2% CAGR (modest). The same 100% return over 2 years = 41.4% CAGR (exceptional). CAGR makes comparisons meaningful; absolute returns often mislead.
Is CAGR the same as XIRR?
CAGR assumes a single investment at the start with no additional cash flows. XIRR (Extended Internal Rate of Return) accounts for multiple cash flows at different dates — making it more accurate for SIPs, dividends reinvested, or partial withdrawals. For lumpsum investments with no intermediate cash flows, CAGR = XIRR. For SIP portfolios, always use XIRR for accurate return measurement.
Can CAGR be negative?
Yes. If final value < initial value, CAGR is negative. ₹1 lakh falling to ₹80,000 over 3 years = CAGR of −7.1% per year. Negative CAGR tells you the annual erosion rate. It is useful for comparing the rate of loss across investments — a −10% CAGR investment is losing value faster than a −5% CAGR one, even if the absolute loss looks similar over a short period.
How do I calculate CAGR for my Zerodha or Groww portfolio?
Export your portfolio's cost value (total invested) and current value from your broker app. Use CAGR = (Current Value ÷ Cost Value)^(1 ÷ Years Invested) − 1, where years invested is calculated from your first investment date. For portfolios with multiple SIP investments or purchases at different times, use XIRR (available in Excel: =XIRR(cash flows, dates)) for accurate calculation.
What is the Rule of 72 and how does it relate to CAGR?
The Rule of 72 states that you divide 72 by your CAGR to estimate doubling time. At 12% CAGR: 72 ÷ 12 = 6 years to double. At 8%: 9 years. At 18%: 4 years. Conversely, if you want to double your money in 5 years, you need 72 ÷ 5 = approximately 14.4% CAGR. This mental shortcut is very useful for quick investment planning.
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