CAGR Calculator — Compound Annual Growth Rate
CAGR converts any investment result into one true annual growth rate, so you can compare funds, stocks, gold and FDs on equal footing. ₹1 lakh → ₹2.5 lakh in 5 years is 20.11% a year.
How CAGR is calculated
CAGR is the constant annual rate that would take your initial value to the final value over the period — smoothing out all the ups and downs in between.
PV = initial value FV = final value
CAGR examples
| Investment | Grew to | Duration | CAGR |
|---|---|---|---|
| ₹1,00,000 | ₹1,50,000 | 3 years | 14.47% |
| ₹1,00,000 | ₹2,00,000 | 5 years | 14.87% |
| ₹1,00,000 | ₹2,50,000 | 5 years | 20.11% |
| ₹1,00,000 | ₹2,00,000 | 10 years | 7.18% |
| ₹1,00,000 | ₹3,00,000 | 10 years | 11.61% |
The two "doubled my money" rows show why CAGR matters: doubling in 5 years is 14.87% a year, but doubling in 10 years is only 7.18% — barely ahead of a fixed deposit.
Frequently asked questions
How is CAGR calculated?
CAGR = (Final Value ÷ Initial Value)^(1 ÷ years) − 1. If ₹1,00,000 grows to ₹2,50,000 in 5 years, CAGR = (2.5)^(1/5) − 1 = 20.11% per year.
What is the difference between CAGR and absolute return?
Absolute return ignores time: ₹1 lakh becoming ₹2 lakh is +100% whether it took 5 or 10 years. CAGR annualizes it — 14.87% per year over 5 years but only 7.18% over 10 years — making investments of different durations directly comparable.
What is a good CAGR for investments in India?
Compare CAGR against alternatives: bank FDs currently compound at roughly 6.0–6.5% (July 2026), so an equity investment is usually expected to beat that meaningfully over long periods to justify its risk. Always compare CAGR over the same time frame.
Does CAGR work for SIP investments?
Not directly. CAGR assumes a single investment at the start. For multiple cash flows like a monthly SIP, use XIRR, which weights each installment by its own investment period. The FinCalix app includes both CAGR and SIP return tools.
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