CAGR Calculator

“My mutual fund gave 85% returns in 3 years — is that good?” It depends entirely on the time period. That is exactly the problem CAGR solves.

CAGR — The One Number Every Investor Needs

Compound Annual Growth Rate (CAGR) tells you the smoothed annual return of any investment — eliminating the distortion caused by volatile year-to-year swings. Whether you are comparing two mutual funds, evaluating a property deal, or tracking business revenue growth, CAGR gives you a single apples-to-apples number. The formula: CAGR = (Final Value / Initial Value)^(1/n) − 1, where n is the number of years.

Three Modes — Find CAGR, Find Final Value, Find Years

Most calculators only compute CAGR from a start and end value. This tool does more. Find CAGR mode is for when you have already exited an investment and want to measure its annualised performance. Find Final Value lets you project how much a sum will grow if it compounds at a specific rate — useful for goal-based planning. Find Years is the rarest mode: enter a target amount and an expected CAGR, and the tool calculates exactly how long you need to stay invested.

Real Numbers: What Has Actually Delivered in India?

Nifty 50 (2004–2024): approximately 14% CAGR. A ₹1 lakh investment would be worth ₹13.7 lakh today. Gold (same period): approximately 11% CAGR. Real estate in metro cities: 8–11% depending on location. Fixed deposits: 6.5–7.5% (pre-tax). The difference between 8% and 14% CAGR over 20 years on ₹5 lakh: the former gives ₹23.3 lakh, the latter ₹86.4 lakh. CAGR differences that seem small compound into massive wealth gaps.

What CAGR Does Not Tell You (Important)

A fund with 15% CAGR over 5 years may have fallen 45% in year 3 and recovered sharply. CAGR hides this. It also does not account for cash flows during the period — dividends received, partial withdrawals or additional investments. For multi-cash-flow scenarios like SIP, use XIRR instead of CAGR. And CAGR is a backward-looking metric — it describes what happened, not what will happen. Use our Lump Sum Calculator to project future value, or our SIP Calculator for periodic investment planning.

CAGR vs IRR vs Absolute Return — When to Use Which

Use absolute return only when comparing investments of the same duration. Use CAGR for single lump-sum investments across different holding periods. Use IRR / XIRR when there are multiple cash flows at irregular intervals (SIP, rental income, partial exits). Most mutual fund factsheets report CAGR for 1-year, 3-year, 5-year and since-inception periods — this is the right way to read them.

✓Verified by ToollyX Team · Last updated June 2026