CAGR Calculator

About the CAGR Calculator

CAGR (Compound Annual Growth Rate) is the single number that makes investment comparisons honest. It tells you the steady annual rate at which an investment would have grown from start to finish, assuming all gains were reinvested each year. A ₹1 lakh investment that grew to ₹2.5 lakh in 5 years has a 150% absolute return - but a CAGR of 20.1% p.a. That single number is directly comparable to any FD rate, mutual fund return, or benchmark index.

Critically, CAGR strips out the effect of holding period so you can compare a 3-year investment against a 12-year one. It is the industry-standard metric for mutual fund fact sheets, PMS performance reports, and stock analysis. When a fund manager says their fund has delivered '18% since inception', they mean 18% CAGR - not 18% per year as simple interest. Understanding this distinction prevents serious misreads of investment performance.

This calculator computes your CAGR and shows a year-wise projection of the investment growing at that rate. It also benchmarks your result against Nifty 50, PPF, FD, and inflation so you can instantly see whether the return beat the market, beat risk-free alternatives, and preserved real purchasing power.

CAGR Formula

Worked Example

Tips & Insights

• 1

  Nifty 50 has delivered approximately 12-14% CAGR over any rolling 10-year period since 2000. This is the baseline that any equity investment must beat to justify its risk over a passive index fund. If your stock picks or active fund shows 11% CAGR over 10 years, a simple Nifty index fund would have done better with lower cost and effort.

• 2

  CAGR hides volatility completely. An investment that fell 60% in year 2 and then tripled in year 3 can show the same CAGR as one that grew steadily. Always check the investment's standard deviation or drawdown history alongside CAGR - especially for equity and real estate.

• 3

  For investments with irregular cash flows - SIPs, PPF top-ups, partial withdrawals, rental income - CAGR gives the wrong answer. Use XIRR (Extended Internal Rate of Return) instead. Excel's XIRR function handles multiple cash flows with their actual dates and gives the true annualised return.

• 4

  Inflation at ~6% is the invisible hurdle every investment must clear just to preserve purchasing power. An FD earning 6.5% has a real CAGR of only 0.5%. Real estate at 5.6% CAGR (as in the example) is actually losing real value. Any investment decision should be evaluated on real (inflation-adjusted) CAGR, not nominal.

• 5

  Gold's CAGR in India over the last 20 years is approximately 11-12% in rupee terms, comparable to large-cap equity. But gold has zero yield (no dividends, no rent) and has storage costs. Its CAGR is purely from price appreciation. The equity equivalent would need to be a zero-dividend stock to make a fair comparison.

• 6

  When evaluating a mutual fund's CAGR, always check the period. A fund showing '28% CAGR' might be measuring from the COVID low of March 2020 to today - a cherry-picked start date. Meaningful comparison requires same-period returns (e.g., 3-year, 5-year, 10-year rolling CAGR) or returns since inception for funds older than 10 years.

• 7

  Reverse CAGR is useful for goal planning: if you need ₹1 crore in 10 years from ₹30 lakh today, what CAGR is required? Enter ₹30L as initial, ₹1Cr as final, 10 years - the result (12.8%) tells you the minimum investment performance your portfolio needs to achieve your goal.

• 8

  Real estate CAGR calculations frequently overstate returns because they ignore: stamp duty (5-7% of purchase price), registration charges, brokerage (1-2%), annual property tax, maintenance costs, and periods of zero rental income. On a ₹55L flat with 7% acquisition costs, your effective initial value for CAGR purposes is ~₹59L, reducing the apparent CAGR by 0.3-0.5% per year.