CAGR Calculator
CAGR tells you the smooth annual growth rate between two points in time, cutting through year-to-year noise. Useful for comparing investments, tracking business revenue growth, or anything else that grows over multiple years.
How to use
- Enter your starting value and where it ended up.
- Enter how many years passed in between.
- You'll get the CAGR percentage and total return, so you can compare it against other options.
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CAGR (Compound Annual Growth Rate) is the rate at which an investment grows from its initial value to its final value over a given period, assuming profits are reinvested each year. It smooths out volatility and gives you a single annual growth rate that represents the investment's performance. The formula is: CAGR = (Ending Value / Beginning Value)^(1/n) − 1, where n is the number of years.
CAGR is widely used to compare mutual fund returns, business revenue growth, and stock performance. For example, if a mutual fund grew from ₹1,00,000 to ₹2,00,000 in 7 years, the CAGR is (2,00,000/1,00,000)^(1/7) − 1 = 10.41% per year. It does not reflect year-to-year volatility, a fund with 50% growth one year and -30% the next may still show a decent CAGR.
Frequently Asked Questions
What is a good CAGR for mutual funds in India?
For equity mutual funds, a CAGR of 12–15% over 5–10 years is considered good. Large-cap funds average 10–12%, while mid and small-cap funds can deliver 14–18% CAGR over long periods. Debt funds typically return 6–8% CAGR.
What is the difference between CAGR and absolute return?
Absolute return is the total percentage gain without considering time. CAGR normalises the return per year. For example, a 100% absolute return over 10 years is only 7.2% CAGR, very different from 100% in 2 years which is 41.4% CAGR.
Can CAGR be negative?
Yes. If the ending value is less than the beginning value, CAGR is negative. For example, if an investment fell from ₹1,00,000 to ₹70,000 in 5 years, the CAGR is approximately −6.9% per year.
What is the difference between CAGR and IRR?
CAGR assumes a single initial investment and a single final value. IRR (Internal Rate of Return) accounts for multiple cash flows at different times, making it more suitable for SIP investments or businesses with irregular cash flows.
Disclaimer: Results are estimates for informational purposes only and do not constitute financial, tax, or investment advice. Figures may vary based on actual terms. Always consult a qualified financial advisor before making financial decisions.