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CAGR calculator for India — compute compound annual growth rate for mutual funds, stocks, and lumpsum investments with ₹ examples.
Enter variables to compute real-time projections
24.57
₹20,000
200
CAGR = ((EV / BV)^(1/t)) - 1CAGR compounding growth calculation formula.
Compound Annual Growth Rate (CAGR) is a standard financial metric used to describe the annual rate at which an investment grows, assuming it grew at a steady, smoothed rate over the specified time period with compounding returns. CAGR is highly valuable because it provides a single, annualized growth rate that allows you to easily compare the performance of different assets (such as stocks, mutual funds, gold, or real estate) over varying time horizons.
CAGR is calculated using the following mathematical formula: CAGR = ((Ending Value / Beginning Value) ^ (1 / Years)) - 1. To express this growth rate as a percentage, multiply the result by 100. This formula calculates the geometric mean of growth, reflecting the true annualized rate of compounding return while smoothing out any intermediate market volatility or yearly fluctuations.
To calculate CAGR manually: 1. Divide the ending value of your investment by its beginning value (e.g. ₹30,000 / ₹10,000 = 3). 2. Divide 1 by the number of years of the investment period (e.g. 1 / 5 = 0.2). 3. Raise the first result to the power of the second result (e.g. 3^0.2 = 1.2457). 4. Subtract 1 from this outcome (e.g. 1.2457 - 1 = 0.2457). 5. Multiply by 100 to get the percentage growth rate (e.g. 0.2457 * 100 = 24.57% CAGR).
Example 1: An initial investment of ₹10,000 grows to ₹30,000 over 5 years. Dividing 30k by 10k gives 3. Raising 3 to the power of 1/5 (0.2) gives 1.2457. Subtracting 1 and multiplying by 100 yields a CAGR of 24.57%, with a Total Gain of ₹20,000 (200% growth). | Example 2: An investment of ₹1,00,000 grows to ₹2,50,000 over 10 years. The CAGR is 9.60%, with a Total Gain of ₹1,50,000 (150% growth). | Example 3: An investment of ₹5,00,000 grows to ₹8,00,000 over 3 years. The CAGR is 16.96%, with a Total Gain of ₹3,00,000 (60% growth).
Unlike simple annual growth rate (which divides total growth by the number of years and ignores compounding), CAGR accounts for the fact that returns compound over time. This makes CAGR a much more realistic and accurate reflection of an investment's performance, especially for volatile assets like stocks or equity mutual funds where returns fluctuate widely from year to year.
Advantages: 1. Standardizes returns: Allows easy comparison between different investments. 2. Accounts for compounding: Reflects true annualized growth. Limitations: 1. Assumes steady growth: Smooths out volatility, making it seem like the investment grew at a constant rate, which is rarely true in reality. 2. Ignore periodic cash flows: Not suitable for SIPs or multiple deposits (for which XIRR/IRR must be used).
CAGR is a fundamental metric for evaluating historical investment returns or projecting future growth requirements. By standardizing growth onto an annualized, compounding scale, it helps investors make informed, comparative decisions and build optimized portfolios.
Compound Annual Growth Rate (CAGR) measures the geometric mean return of an investment over a multi-year period, representing the constant annual rate at which an investment grows from its initial balance to its final balance.
Unlike simple percentage returns, CAGR accounts for the compounding effect over time and provides a smooth annual baseline to compare performance across stocks, mutual funds, gold, real estate, and fixed deposits.
CAGR is particularly vital for evaluating volatile assets because it accurately reflects realistic annual growth without being skewed by single-year spikes or drops.
You invested ₹1,00,000 in a portfolio on Jan 1, 2021. On Jan 1, 2026, the portfolio value is ₹2,01,135.
Even though total return was 101.14%, the true compound annual growth rate that generated this result was 15.00% per year.