CAGR Calculator
Find the compound annual growth rate (CAGR) of an investment, a property or a business: the steady yearly rate that takes the starting value to the ending value.
Going from ₹1,00,000 to ₹2,50,000 in 7 years is the same as growing 13.99% every year.
CAGR suits one investment in and one value out. For SIPs or several deposits and withdrawals at different dates, use XIRR.
What is CAGR?
CAGR (compound annual growth rate) is the single yearly growth rate that would take an investment from its starting value to its ending value, if it had grown at the same pace every year. Real returns go up and down; CAGR smooths them into one number you can compare with an FD rate, a fund’s benchmark or another investment held for a different length of time.
CAGR formula
CAGR = (Ending value ÷ Starting value)1 ÷ years − 1
The power of 1 ÷ years turns the total growth into a yearly rate. For a period in months, use years = months ÷ 12: ₹1 lakh growing to ₹1.25 lakh in 18 months is a CAGR of 16.04%.
How to calculate CAGR
Divide the ending value by the starting value, raise the result to the power of 1 ÷ number of years, then subtract 1. For ₹1,00,000 that grows to ₹2,50,000 in 7 years:
- Ending ÷ starting = 2,50,000 ÷ 1,00,000 = 2.5
- 2.51/7 = 1.1399
- 1.1399 − 1 = 0.1399, so CAGR = 13.99% a year
The absolute return is 150%, but that number on its own says nothing about how long it took.
How to calculate CAGR in Excel
With the starting value in B1, the ending value in B2 and the number of years in B3, use =(B2/B1)^(1/B3)-1, or Excel’s built-in =RRI(B3,B1,B2). Format the cell as a percentage. Google Sheets supports both.
What is a good CAGR?
A good CAGR beats both inflation and the safe alternative for the same period, and for equity, beats its benchmark index. As reference points for India:
| Benchmark | CAGR | Period |
|---|---|---|
| Nifty 50 Total Return Index | 12.39% | 10 years to 17 July 2026 |
| Nifty 50 Total Return Index | 12.44% | 20 years to 27 February 2026 |
| Nifty 50 (price only, no dividends) | 11.04% | 10 years to 17 July 2026 |
| PPF (current rate) | 7.1% | October–December 2026 quarter |
Index figures are from NSE Indices, as published by Bajaj Finserv AMC. A large-cap fund with a 10-year CAGR below about 12% has done worse than simply owning the index. At 12.44% a year, money multiplies about 10.4 times in 20 years.
Real CAGR after inflation
To find the growth in buying power, divide (1 + CAGR) by (1 + inflation) and subtract 1. A 12% CAGR with 5% inflation is a real CAGR of 6.67%, not 7%. An FD earning 6.5% before tax barely keeps pace with 5% inflation once the interest is taxed.
CAGR vs absolute return
Absolute return is the total gain with no time attached; CAGR spreads it across the years. Fund A turned ₹1 lakh into ₹1.6 lakh in 3 years; Fund B turned ₹1 lakh into ₹2 lakh in 5 years. Fund B’s absolute return looks better (100% against 60%), but Fund A grew faster: a CAGR of 16.96% against 14.87%.
CAGR vs average annual return
The simple average of yearly returns overstates growth whenever returns swing; CAGR gives the rate you actually earned. If ₹1 lakh rises 50% in year one and falls 50% in year two, the average return is 0%, but you are left with ₹75,000: a CAGR of −13.4%. This is why fund factsheets report CAGR, not averages.
CAGR vs XIRR
Use CAGR for one investment made at the start and valued at the end; use XIRR when money goes in or out on several dates, as with a SIP. Applying CAGR to a SIP’s total investment overstates the time your money was invested and understates the return. Use the XIRR Calculator for SIPs, partial withdrawals or several purchases.
CAGR for property, business revenue and stocks
- Property: a flat bought for ₹40 lakh in 2014 and worth ₹85 lakh in 2026 grew at a CAGR of 6.48%, before stamp duty, maintenance and rent are counted.
- Business revenue: sales rising from ₹1.2 crore to ₹3 crore in 4 years is a revenue CAGR of 25.74%.
- Stocks: use the purchase price and the current price plus dividends received, for the exact holding period.
How to find the future value from a CAGR
Future value = Starting value × (1 + CAGR)years. ₹5 lakh growing at 12% for 10 years becomes about ₹15.53 lakh. Turned around, reaching ₹20 lakh from ₹5 lakh in 12 years needs a CAGR of 12.25%. The Lumpsum Calculator does this projection year by year.
How long does money take to double?
Divide 72 by the CAGR. At 12%, money doubles in about 6 years (the exact figure is 6.1). At 7.1%, the PPF rate, it takes about 10 years.
Can CAGR be negative?
Yes. If the ending value is below the starting value, CAGR is negative. ₹2 lakh falling to ₹1.5 lakh over 3 years is a CAGR of −9.14% a year.
When CAGR is the wrong measure
- Regular investments. SIPs and staggered purchases need XIRR.
- Very short periods. Annualising a few months of returns exaggerates them.
- Risk. Two funds with the same CAGR can have very different falls along the way; CAGR hides the ride.
- Start and end dates. Starting at a market peak or a crash changes CAGR a lot, so compare funds over the same dates.
When to use a different calculator
- Measuring SIP returns or several cash flows? Use the XIRR Calculator.
- Projecting a one-time investment forward? Use the Lumpsum Calculator.
- Checking a mutual fund’s returns? Use the Mutual Fund Returns Calculator.
Sources
- SEBI investor education (Securities and Exchange Board of India)
- AMFI: mutual fund NAVs and investor information (Association of Mutual Funds in India)
This is general information, not tax or investment advice. See how we check rates and our corrections log.
