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FinCalc India

CAGR Calculator

CAGR (Compound Annual Growth Rate) is the constant yearly rate that would take an investment from its starting value to its ending value over a given period. It smooths out the ups and downs into a single comparable number.

Enter the initial value, the final value and the number of years.

Assumptions used
  • A single investment with no interim additions or withdrawals.
  • The period is treated as an exact number of years.

Enter your details

₹
11,00,00,00,000
₹
11,00,00,00,000
years
150

Results

CAGR

20.11%

Absolute Return
150.00%
Growth Multiple
2.5x
Total Gain
₹1,50,000

CAGR formula

CAGR = (Final ÷ Initial)^(1 ÷ years) − 1

  • Final = ending value
  • Initial = beginning value
  • years = length of the period

Multiply by 100 to express it as a percentage.

Worked example

  1. An investment grows from ₹1,00,000 to ₹2,50,000 in 5 years.
  2. CAGR = (2,50,000 ÷ 1,00,000)^(1 ÷ 5) − 1
  3. CAGR = 2.5^0.2 − 1 ≈ 0.2011
  4. So the CAGR is about 20.1% per annum, even though the absolute return is 150%.

CAGR vs absolute return

  • Absolute return ignores time: doubling your money is +100% whether it took 2 years or 20.
  • CAGR builds in time, so it lets you compare investments of different durations on a level footing.
  • CAGR hides volatility — two investments with the same CAGR can have very different risk and drawdowns.

When not to use CAGR

CAGR assumes a single lump investment with no additions or withdrawals. For a SIP or any cash-flow stream, use XIRR instead, which accounts for the timing of each flow.

This calculator is for education and illustration only. Results are estimates based on the inputs and assumptions shown and are not financial, investment, tax or legal advice. Verify figures with your bank, a registered adviser or the relevant government department before acting.

Frequently asked questions

What is a good CAGR for an investment?

It depends on the asset and period. Long-run equity index CAGRs in India have often been in the low-to-mid teens; a fixed deposit is far lower. Compare against a relevant benchmark, not an absolute number.

What is the difference between CAGR and annual return?

An annual return is for one specific year and varies year to year. CAGR is the single constant rate that connects the start and end values over the whole period.

Can CAGR be negative?

Yes. If the final value is lower than the initial value, the CAGR is negative, meaning the investment shrank at that compounded annual rate.

Should I use CAGR for my SIP returns?

No. A SIP has multiple investments at different times. Use XIRR, which is the internal rate of return for irregular cash flows, to measure SIP performance.

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