CAGR represents the smoothed annual rate at which an asset grows if it grew at a steady rate over the investment period, compounding annually.
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CAGR Calculator
Compute the Compound Annual Growth Rate (CAGR) of an investment over a specific time horizon.
CAGR Calculator
Maturity Projections
Calculated CAGR Rate%
Total Gain (%)%
Profit Amount₹70,000
Frequently Asked Questions (FAQ)
Why is CAGR better than absolute returns?+
What is a CAGR Calculator?
Compute the Compound Annual Growth Rate (CAGR) of your investments to understand the annualized rate of return over any period of years.
How to Use This Calculator
- Enter your primary figure—such as your gross salary, product price, or target investment amount—into the base input field.
- Adjust the sliders or type numbers directly into the fields to specify parameters like interest rates and tenure duration.
- Enter any additional applicable values, such as tax-saving deductions, extra fees, or custom contribution percentages.
- Review the instant breakdown results, evaluate the visual compounding charts, and download the full breakdown as a PDF report.
Example Calculation: Compounding Investment Example
This table shows a realistic example calculation based on standard parameters. Enter your custom numbers in the sliders above to compare results.
| Parameter | Sample Value |
|---|---|
| Investment Style | Monthly SIP |
| Monthly Contribution | ₹10,000 |
| Expected Return Rate | 12% per annum |
| Duration Period | 15 Years |
| Total Maturity Value | ₹50,45,760 |
What is CAGR (Compound Annual Growth Rate)?
Mathematical Formula:
CAGR = (FV / PV)^(1 / n) - 1
Frequently Asked Questions
What is CAGR?
CAGR stands for Compound Annual Growth Rate, which represents the smoothed annual rate at which an asset grows if it grows at a steady rate over a set period. It is not the actual return rate, but rather a geometric progression ratio that measures compound yield. For example, if you buy a stock at ₹1,00,000 and sell it for ₹2,00,000 after 5 years, the CAGR is 14.87% per year. This rate represents the annual compounding return required to turn that starting capital into the final value.
How is CAGR calculated?
CAGR is calculated using the formula: CAGR = [(Final Value / Initial Value)^(1 / n)] - 1, where n is the number of years. For example, if your mutual fund portfolio grew from an initial ₹5,00,000 to ₹10,00,000 in 6 years, the formula is: [ (10,00,000 / 5,00,000)^(1 / 6) ] - 1. This evaluates to (2)^0.1667 - 1, giving a CAGR of exactly 12.25% per year. CAGR is highly effective for evaluating volatile investment assets over multiple years.
What is a good CAGR for stocks?
Historically, broad market indices like the Nifty 50 have delivered an average compounding return of 12% to 14% CAGR over long periods of 10+ years. Therefore, earning a CAGR of 15% to 20% on individual stock portfolios is considered outstanding. For instance, compounding capital at a 15% CAGR will double your money every 4.8 years, whereas a 20% CAGR will double it in just 3.6 years. High CAGRs on individual stocks often come with higher short-term risk.
What is the difference between CAGR and absolute return?
Absolute return measures the total percentage gain or loss on an investment without considering the time duration involved. For example, if an investment of ₹1,00,000 grows to ₹1,50,000, the absolute return is 50%. If this growth took 1 year, the CAGR is also 50%; however, if it took 5 years, the CAGR drops to a modest 8.45% per year. Comparing investments based purely on absolute returns can be misleading if their holding tenures differ.
Can CAGR be negative?
Yes, CAGR will be negative if the final valuation of your investment is lower than the initial amount you invested. For example, if you buy shares for ₹1,00,000 and their value drops to ₹70,000 after 3 years, the CAGR is calculated as [(70,000 / 1,00,000)^(1/3)] - 1. This results in a negative CAGR of -11.21% per year. A negative CAGR indicates a compounding annual loss of capital over that specific timeframe.
What is the Rule of 72?
The Rule of 72 is a quick mental formula used to estimate the number of years required to double your investment at a given compound annual return rate. You calculate this by dividing 72 by the expected annual CAGR. For instance, if your equity mutual fund portfolio grows at a 12% CAGR, your money will double in approximately 6 years (72 / 12). If the return is 8% CAGR, it will take about 9 years to double your initial capital.