Geometric Mean Annual Growth • Fractional Tenure Support

CAGR Calculator

Calculate the Compound Annual Growth Rate (CAGR) of mutual funds, stocks, real estate, or business revenues to measure true annualized performance over any holding period.

True Annualized Return•Absolute Gain & % Growth•Supports Fractional Years•100% Free & Private

Investment Valuations

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Beginning Value (₹)

₹

₹5,000₹1.00 L₹10 Lakhs

Ending Value (₹)

₹

₹5,000₹2.50 L₹30 Lakhs

Holding Period (Years)

Yrs

6 Months (0.5Y)5 Years25 Years

Annualized Growth (CAGR)

+20.11%

5 Years

Total Absolute Gain / Loss:

+₹1,50,000

Absolute Percentage Return:

+150%

Performance Interpretation:

Your capital grew from ₹1,00,000 to ₹2,50,000 over 5 years, effectively compounding at 20.11% year after year (Multiplier: 2.5x).

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Understanding Compound Annual Growth Rate (CAGR)

Why annualized CAGR provides an accurate picture of asset performance compared to misleading absolute returns.

1. Why Absolute Returns Are Misleading

If an investment generates a 100% gain, it sounds impressive. But if that 100% gain took 12 years to achieve, the actual compounded annual rate (CAGR) was only 5.95% — which barely matches a standard bank fixed deposit.

CAGR eliminates market volatility and smooths the multi-year return into a single hypothetical annual rate that connects the start point to the end point.

2. The CAGR Equation

CAGR = ( (Ending Value / Beginning Value) ^ (1 / n) ) - 1

Where: Beginning Value > 0, n = Duration in years (e.g. 3.5 years)

3. Benchmark Asset CAGRs in India (10-Year Historical Context)

Asset Class	Typical 10-Yr Historical CAGR	Volatility Risk	Tax Treatment
Nifty 50 Index (Large Cap)	12% – 14%	Moderate / High	12.5% LTCG > ₹1.25L
Nifty Midcap 150 Index	15% – 18%	High	12.5% LTCG > ₹1.25L
Gold (INR)	10% – 12%	Moderate	12.5% LTCG (24+ mos)
Bank Fixed Deposits	6.5% – 7.5%	Very Low	Slab rate + TDS
Public Provident Fund (PPF)	7.1% (Tax-Free)	Zero (Sovereign)	100% Tax-Free (EEE)

Have Irregular Cash Flows or SIPs?If you have made multiple periodic investments or cash withdrawals over time rather than a single buy-and-hold entry, CAGR will give an inaccurate result. Use our XIRR Calculator to compute true money-weighted annualized performance.

Frequently Asked Questions on CAGR

Everything you need to know about calculating annualized investment performance.

What is Compound Annual Growth Rate (CAGR)?

CAGR is the mean annual growth rate of an investment over a specified period of time longer than one year. It represents what an investment would have yielded annually had it grown at a steady, constant compounded rate.

What is the mathematical formula for CAGR?

The formula is: CAGR = [(Final Value / Initial Value) ^ (1 / n)] - 1, where n is the investment period in years. The result is multiplied by 100 to express it as an annual percentage.

What is the difference between Absolute Return and CAGR?

Absolute Return simply measures the total percentage gain or loss without considering time: [(Final - Initial) / Initial] × 100. For example, a 100% gain over 10 years has an absolute return of 100%, but its CAGR is actually 7.18% p.a. CAGR reveals the true annualized power of the investment.

When should I use CAGR vs XIRR?

CAGR is designed for single lumpsum investments with only one cash inflow at the beginning and one cash outflow at the end. If you make multiple intermittent cash flows, recurring SIPs, or partial redemptions on irregular dates, you must use XIRR (Extended Internal Rate of Return).

Can CAGR be negative?

Yes, if the ending value of the investment is lower than the beginning value, CAGR will be a negative percentage, indicating an annualized loss over the holding period.

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