CAGR Calculator

CAGR (Compound Annual Growth Rate) is the rate at which an investment would have grown if it grew at a steady rate annually. It smooths out volatility and shows the consistent yearly growth needed to go from a starting value to an ending value over a specific period. Formula: CAGR = (End Value / Start Value)^(1/Years) − 1.

Average annual return just averages yearly percentage changes (arithmetic mean). CAGR is the geometric mean — it accounts for compounding. Example: An investment goes +100% then -50% over 2 years. Average return = 25%, but CAGR = 0% (back to original). CAGR is always more accurate for multi-year performance.

Historically, the S&P 500 has delivered ~10% CAGR over long periods. Indian Nifty 50 has delivered ~12-14% over 20 years. Individual stocks can have much higher or lower CAGRs. For a diversified equity portfolio, 10-15% CAGR over 10+ years is considered good.

Yes. If the ending value is less than the starting value, CAGR is negative. For example, an investment going from ₹1,00,000 to ₹70,000 over 5 years has a CAGR of -6.9%. Negative CAGR means the investment lost value in real terms each year on average.

CAGR works when you have a single starting investment and a single ending value. IRR (Internal Rate of Return) handles multiple cash flows at different times — like SIPs with monthly contributions or a business with irregular income. For lump-sum investments, CAGR and IRR are equivalent. For periodic investments, use XIRR.

Future Value = Present Value × (1 + CAGR)^n, where n = number of years. Example: ₹1,00,000 invested at 12% CAGR for 10 years = ₹1,00,000 × (1.12)^10 = ₹3,10,585. Our calculator does this in reverse too — enter any three values to find the fourth.

Rule of 72: Years to double = 72 ÷ CAGR%. At 12% CAGR, money doubles every 72/12 = 6 years. At 8% CAGR, it doubles every 9 years. It's a quick mental shortcut. Our calculator shows the exact doubling time alongside CAGR.

Mutual fund factsheets always show 1-year, 3-year, 5-year, and 10-year CAGR returns. These tell you the annualised return for each period. When comparing two funds, use the same time period. A fund with 15% CAGR over 10 years is significantly better than one with 15% over 1 year (which is just 1-year point-to-point return).

Not automatically. If you calculate CAGR using only stock price, you get price CAGR. Total Return CAGR includes reinvested dividends and is always higher. For equity funds, NAV-based CAGR usually includes dividend reinvestment (growth option). Always specify whether CAGR is price-only or total return.

CAGR can be misleading for short periods (1-2 years) because a single good or bad year dominates. A stock up 200% in year 1 and flat in year 2 shows 41.4% CAGR over 2 years — which seems impressive but may not be sustainable. CAGR is most meaningful over 5+ year periods.