CAGR Calculator

Step-by-step guide

1. 1.Enter the initial value of the investment.
2. 2.Enter the final value.
3. 3.Enter the holding period in years.
4. 4.Read the annualized growth rate — the only fair way to compare different investments.
5. 5.Compare the CAGR against your target return, but remember past CAGR does not predict future returns.

Real-life example

Rahul bought mutual fund units for ₹4 lakh; they are worth ₹9.5 lakh after 6 years. The CAGR works out to about 15.5% a year. Another investment grew from ₹3 lakh to ₹6 lakh in 3 years — a 26% CAGR — but over a shorter, riskier window.

How this calculator works

Calculates the annualized growth rate between the initial and final values. It assumes one beginning value and one ending value, without interim deposits or withdrawals.

The result is an educational estimate, not a guaranteed return or personal financial recommendation. Review current product documents and consult a qualified advisor before investing.

Why this matters

CAGR (Compound Annual Growth Rate) is the only honest way to compare investments across different time periods. A fund that doubled in 3 years (26% CAGR) outperformed one that tripled in 10 years (11.6% CAGR). Use this to evaluate mutual fund performance, property returns, or business growth — but remember: past CAGR does not predict future CAGR.

Common mistakes to avoid

Comparing CAGR across different periods — a 5-year CAGR cannot be compared to a 10-year CAGR directly. Using CAGR for SIPs — XIRR is the correct metric for irregular cash flows. Ignoring volatility — two funds with 12% CAGR can have very different risk profiles (max drawdown, Sharpe ratio). Assuming past CAGR predicts future returns — mean reversion is powerful.

Frequently asked questions