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CAGR Calculator India 2025

Calculate Compound Annual Growth Rate (CAGR) to analyze investment performance and compare returns over different time periods.

₹
₹10K₹50L
₹
₹10K₹1Cr
0.5 years30 years

CAGR (Annualized Return)

14.47%

Per annum compound growth

Total Gain
₹50.00 K
Absolute Return
50.00%
Average Annual Gain
₹16.67 K
Investment Period
3 years

Understanding CAGR Calculator

Who Should Use This Calculator

The CAGR calculator is essential for making informed investment decisions across different time periods and asset classes.

  • Investors & Portfolio Managers: Compare mutual funds, stocks, and real estate performance
  • Financial Planners: Set realistic investment goals and evaluate fund manager performance
  • Long-term Investors: Analyze investment performance over multiple years

Why CAGR Analysis Matters

CAGR provides a standardized metric that shows true annualized performance by accounting for compounding effects.

  • Eliminates Volatility Noise: Shows consistent annual growth rate needed for final value
  • Better Than Simple Average: Accounts for compounding effects over time
  • Universal Comparison: Compare investments with different time periods

Key Applications & Benchmarks

CAGR helps in making strategic investment decisions and setting realistic return expectations.

  • Equity Investments: 12-15% CAGR is considered good for Indian equity markets
  • Debt Instruments: 8-10% CAGR is reasonable for fixed income investments
  • SIP Planning: Useful for retirement corpus and goal-based investing

Important Considerations

Understanding CAGR limitations helps you use it more effectively in investment decisions.

  • Assumes Constant Growth: Real investments rarely grow at steady rates
  • Best for Lump Sum: For SIPs, consider XIRR instead of CAGR
  • Tax Impact: Post-tax CAGR may differ significantly from gross returns

CAGR (Compound Annual Growth Rate) Formulas

Mathematical formulas to calculate CAGR for investments and understand annualized growth rates.

1

CAGR Formula

Calculate the compound annual growth rate between two values over time.

CAGR = ((Ending Value / Beginning Value)^(1/n)) - 1

Example:

Investment grew from ₹1,00,000 to ₹2,50,000 in 5 years

((2,50,000 / 1,00,000)^(1/5)) - 1
= 20.11% CAGR

Variables:

Ending Value - Final value of investment
Beginning Value - Initial investment amount
n - Number of years
2

Future Value using CAGR

Calculate future value using CAGR and time period.

Future Value = Present Value × (1 + CAGR)^n

Example:

₹5,00,000 with 15% CAGR for 8 years

5,00,000 × (1 + 0.15)^8
= ₹15,29,699

Variables:

Present Value - Current investment value
CAGR - Expected annual growth rate
n - Number of years

These formulas provide the mathematical foundation for the calculations. Actual results may vary based on rounding, compounding frequency, and specific lender policies.

Benefits of CAGR Analysis

  • Smooths out volatility to show consistent growth rate
  • Enables comparison between different investment options
  • Provides normalized annual performance metric
  • Helps in setting realistic investment expectations

Important Considerations

  • CAGR assumes steady growth, actual returns may vary
  • Higher CAGR typically involves higher risk
  • Consider tax implications on investment gains
  • Past performance doesn't guarantee future results

CAGR Calculator FAQs

Get answers to common questions about CAGR calculations, investment analysis, and compound annual growth rates.

What is CAGR and how is it different from absolute returns?

CAGR (Compound Annual Growth Rate) is the annualized rate of return that smooths out volatility over multiple time periods. Unlike absolute returns which show total gain/loss, CAGR shows the consistent yearly growth rate needed to reach the final value from the initial investment.

How is CAGR calculated?

CAGR = [(Final Value / Initial Value)^(1/Number of Years)] - 1. This formula assumes that returns are reinvested and compounded annually, providing a normalized annual growth rate.

When should I use CAGR instead of simple returns?

Use CAGR when comparing investments with different time periods, analyzing long-term performance, or when you want to understand the consistent growth rate. It's particularly useful for mutual funds, stocks, and SIP investments over multiple years.

What is a good CAGR for different types of investments?

Equity mutual funds: 12-15% CAGR is considered good. Fixed deposits: 6-8% CAGR. Real estate: 8-12% CAGR. However, higher CAGR usually means higher risk, so consider your risk tolerance and investment goals.

Can CAGR be negative?

Yes, CAGR can be negative if the final value is less than the initial investment. A negative CAGR indicates that the investment has lost value over the given time period on an annualized basis.

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