CAGR Calculator
Calculate Compound Annual Growth Rate for any investment — plus reverse CAGR and future value projections.
CAGR Calculation
Year-wise Value Projection
| Year | Value | Gain from Start | YoY Growth |
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What Is CAGR?
CAGR (Compound Annual Growth Rate) is the mean annual growth rate of an investment over a specified time period longer than one year. It represents one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time.
CAGR Formula
Example: An investment of ₹1,00,000 grows to ₹2,00,000 in 5 years → CAGR = (2,00,000/1,00,000)^(1/5) - 1 = 2^0.2 - 1 = 14.87%
CAGR vs Absolute Return vs XIRR
- Absolute Return: Simple (Final − Initial) / Initial × 100. Ignores time. Not useful for comparison across different periods.
- CAGR: Annualises the return. Best for comparing investments over different time periods. Assumes a steady growth rate — actual returns fluctuate year to year.
- XIRR: Handles irregular cash flows (multiple SIP investments, partial withdrawals). More accurate for real-world mutual fund portfolios.
What Is a Good CAGR?
- Fixed Deposits: 6–7% CAGR
- PPF/EPF: 7–8.5% CAGR
- Large-cap equity MF: 12–14% CAGR (10-year average)
- Mid/small-cap equity MF: 15–20% CAGR (10-year average, with higher volatility)
- Real estate: 8–12% CAGR (location-dependent)
- Nifty 50 index: ~13% CAGR over 20 years
FAQ
Can CAGR be negative?
Yes. If the final value is less than the initial value, CAGR will be negative, indicating an annualised loss.
Is CAGR the same as the actual annual return?
No. CAGR smooths out volatility and assumes steady year-on-year growth. In reality, returns fluctuate each year. CAGR is the hypothetical constant rate that would produce the same final result.
How is CAGR used in mutual fund advertisements?
SEBI mandates that mutual funds show CAGR (not absolute returns) for periods over 1 year. It gives investors a standardised way to compare fund performance across different time horizons.