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.
Investment Valuations
0ms Local Engine+₹1,50,000
+150%
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).
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) |
Frequently Asked Questions on CAGR
Everything you need to know about calculating annualized investment performance.
What is Compound Annual Growth Rate (CAGR)?
What is the mathematical formula for CAGR?
What is the difference between Absolute Return and CAGR?
When should I use CAGR vs XIRR?
Can CAGR be negative?
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