CAGR Calculator
Understanding real investment returns after tax and inflation. Free online CAGR calculator for mutual funds, SIP, lumpsum, and stock portfolios.
Want to grow your wealth at the right CAGR?
How to Use the CAGR Calculator
Enter your initial investment amount
Enter your final investment amount
Enter the duration in years
Click "Calculate" to get your CAGR percentage
What is CAGR?
CAGR stands for Compound Annual Growth Rate. It is the annualized percentage return of an investment over a specified time period, assuming the profits are reinvested at the end of each year. Unlike simple or absolute returns, CAGR accounts for the compounding effect and neutralizes the impact of volatility.
Why Calculate CAGR?
Standardized Metric
CAGR removes the volatility of year-to-year returns and shows the true compounded growth rate.
Investment Comparison
Compare mutual funds, stocks, or any two investments on an equal footing using CAGR.
Real Performance Assessment
CAGR accounts for the time value of money, unlike absolute returns.
Tax Planning
Understand how taxes reduce your CAGR and plan for post-tax wealth creation.
Goal Setting
Use your historical CAGR to project future corpus and set realistic investment goals.
How to Calculate CAGR: Step-by-Step Example
Let us say you invested ₹50,000 in a mutual fund on January 1, 2020, and its current value is ₹92,500 on January 1, 2025 (5 years later).
Using the formula:
CAGR = (FV / PV) 1 / n – 1
CAGR = (92,500 / 50,000)^(1/5) - 1
CAGR = (1.85)^(0.2) - 1
CAGR = 1.136 - 1 = 0.136 or 13.6%
This means your investment grew at 13.6% annually over the 5-year period.
SIP CAGR vs Lumpsum CAGR
SIP (Systematic Investment Plan) CAGR and lumpsum CAGR are calculated differently because money enters the investment at different times.
With a lumpsum CAGR, you invest the entire amount on Day 1. The entire corpus benefits from growth over the full investment period.
With a SIP CAGR, you invest a fixed amount monthly. Early installments have more time to grow than later ones. Therefore, SIP CAGR will typically be lower than lumpsum CAGR for the same underlying returns, because later contributions have less compounding time.
Our SIP CAGR calculator accounts for this timing difference, giving you the true rate of return on your SIP contributions.
Frequently Asked Questions
A CAGR of 12-15% for equity mutual funds is considered healthy over a 5-10 year period. For fixed deposits, 5-6% is typical. For savings accounts, 3-4%. However, what matters is your personal goal and time horizon. IF you need 12% CAGR to meet your retirement goal, then anything below is insufficient.
Average annual return is the arithmetic mean of yearly returns. CAGR is the geometric mean. CAGR is more accurate because it accounts for compounding. A fund that gained 50% in Year 1 and lost 20% in Year 2 has an average return of 15%, but CAGR is lower (around 9%) because losses compound on a smaller base.
Yes. IF your investment declined in value over the period, your CAGR will be negative. For example, IF you invested ₹1,00,000 and it fell to ₹80,000 over 5 years, your CAGR is negative 4.66%.
SIP CAGR is more complex than lumpsum CAGR because money enters at different times. Use our SIP CAGR calculator, which uses the XIRR formula to account for irregular cash flows. XIRR (Extended Internal Rate of Return) is the true rate of return on investments with multiple entry points.
No. Mutual fund CAGR already deducts expense ratios (management fees), so that is built in. But CAGR does NOT deduct income tax, GST on advisory fees, or transaction charges. Use our tax calculator to model post-tax returns.
CAGR is designed for longer holding periods (3+ years). For short-term investments (days to weeks), use simple return calculations instead. CAGR smooths out volatility, which is meaningful only when compounding has time to work.
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