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CAGR Calculator

Find the compound annual growth rate of any investment. Enter the starting value, the ending value and the number of years to see the CAGR and absolute return.

₹
₹
years
Total gain
₹20,000
Absolute return
400%
CAGR
37.97%

Your investment grew at an average of 37.97% a year, compounded, over 5 years.

What is CAGR?

The compound annual growth rate (CAGR) tells you how fast an investment grew each year on average, taking compounding into account. Real investments never grow at the same pace every year: a stock may rise 30% one year and fall 10% the next. CAGR replaces that bumpy path with the single steady rate that gets you from the same start to the same finish.

Because it is annualised, CAGR lets you compare investments held for different periods: a stock you held for 3 years, a mutual fund held for 7 years and a plot of land held for 12 years.

CAGR formula

CAGR = (Ending value ÷ Beginning value)1/n − 1

where n is the number of years. The result is multiplied by 100 to get a percentage.

Worked example

You invested ₹1,00,000 and after 5 years it is worth ₹2,50,000. The ratio is 2.5, and 2.51/5 ≈ 1.2011. Subtract 1 to get a CAGR of about 20.11%. The absolute return is 150%.

CAGR vs absolute return

InvestmentAbsolute returnCAGR
₹50,000 → ₹80,000 in 3 years60%16.96%
₹1,00,000 → ₹2,00,000 in 5 years100%14.87%
₹1,00,000 → ₹2,50,000 in 5 years150%20.11%

Absolute return ignores time, which can make a long, slow investment look better than it is. CAGR puts every investment on the same yearly scale.

Where CAGR is useful

  • Comparing mutual funds: fund factsheets report 3-, 5- and 10-year returns as CAGR.
  • Checking a stock you hold: enter your buy price, today's price and how long you have held it. Bought in parts? Find your average buy price first.
  • Company analysis: revenue or profit CAGR shows how steadily a business is growing.
  • Property and gold: see whether a real asset really beat a fixed deposit.

Limitations of CAGR

  • It hides volatility: two investments with the same CAGR may have had very different ups and downs.
  • It assumes one investment at the start and nothing added or withdrawn. For SIPs, use XIRR.
  • It looks backwards. A high past CAGR does not guarantee future returns.

To project forward instead, use the lumpsum calculator with the CAGR you expect.

Frequently asked questions

What is CAGR?

CAGR (compound annual growth rate) is the constant yearly rate at which an investment would have grown from its starting value to its ending value, assuming profits were reinvested every year. It smooths out ups and downs into one comparable number.

What is the CAGR formula?

CAGR = (Ending value ÷ Beginning value)^(1 ÷ number of years) − 1. Multiply by 100 to express it as a percentage.

What is the difference between CAGR and absolute return?

Absolute return is the total percentage gain, regardless of time. CAGR spreads that gain over the holding period. A 100% absolute return is excellent over 3 years (about 26% CAGR) but modest over 15 years (about 4.7% CAGR).

What is a good CAGR?

It depends on the asset and the risk. As a rough guide, a CAGR above inflation (about 4–6% in India) preserves purchasing power, fixed deposits typically deliver 6–7.5%, and diversified equity has historically delivered around 10–13% over long periods.

Can I use CAGR for SIP returns?

Not accurately. CAGR assumes a single investment at the start. For SIPs or investments made at different times, XIRR is the right measure because it accounts for the date of every cash flow.

Sources

Last updated 19 September 2026. Results are estimates for planning only and are not investment, tax or legal advice. See our disclaimer.