Discover exactly how fast your investments are growing. Our Compound Annual Growth Rate (CAGR) Calculator helps you measure the smoothed annualized return of your mutual funds, stocks, real estate, or business ventures over a specific time period.
How to use the CAGR Calculator?
1. Initial Value: Enter the amount you originally invested or the starting value of the asset.
2. Final Value: Enter the current market value or the amount you sold it for.
3. Duration: Specify the exact time you held the investment in Years and Months. The calculator will automatically convert this into a fractional year for precise math.
4. Evaluate Results: Instantly see your CAGR, Absolute Return (Total ROI), and exact monetary profit generated.
CAGR vs Absolute Return
Absolute Return simply tells you how much your money grew in total from start to finish. If you invested ₹100 and it became ₹200, your Absolute Return is 100%. However, this metric completely ignores time. A 100% gain in 1 year is incredible; a 100% gain over 10 years is mediocre.
CAGR (Compound Annual Growth Rate) solves this by telling you the theoretical, steady year-over-year growth rate required to take your initial value to your final value within that timeframe. It accounts for the magic of compound interest.
The CAGR Formula
Frequently Asked Questions
Historically, a good long-term CAGR for large-cap Indian equity mutual funds is between 10% to 12%, while mid-cap and small-cap funds might yield 14% to 18% over a 10+ year horizon.
No, CAGR inherently assumes a single lump-sum investment at the beginning and a single final value at the end. To calculate returns for Systematic Investment Plans (SIPs) where you make multiple deposits, you must use XIRR (Extended Internal Rate of Return).
CAGR smooths out volatility, making it seem like your investment grew perfectly steadily every year. In reality, a stock might have dropped 20% one year and risen 40% the next. CAGR hides this risk and volatility.
Yes, if your Final Value is strictly lower than your Initial Value, your Compound Annual Growth Rate will be represented as a negative percentage, indicating annualized capital erosion.
Our calculator handles this perfectly by allowing you to enter 0 years and X months, converting the duration to a proper decimal fraction for the mathematical computation.