CAGR Calculator — Compounded Annual Growth Rate
How the CAGR Calculator India Works
CAGR reference table — growth from ₹1 lakh to different final values
| Initial Value (₹) | Final Value (₹) | Duration (Years) | CAGR |
|---|---|---|---|
| ₹1,00,000 | ₹2,00,000 | 5 years | 14.87% |
| ₹1,00,000 | ₹2,00,000 | 10 years | 7.18% |
| ₹1,00,000 | ₹3,10,585 | 10 years | 12.00% |
| ₹1,00,000 | ₹5,00,000 | 10 years | 17.46% |
| ₹1,00,000 | ₹10,00,000 | 10 years | 25.89% |
Real-World Examples — 2026
Comparing two mutual funds using CAGR
Fund A grew from ₹1 lakh to ₹2.5 lakhs in 5 years: CAGR = (2.5)^(1/5) − 1 = 20.1%. Fund B grew from ₹1 lakh to ₹2 lakhs in 4 years: CAGR = (2)^(1/4) − 1 = 18.9%. Fund A has a higher CAGR despite taking longer. CAGR is the correct metric for comparing funds across different time periods.
Calculating portfolio CAGR across 10 years
An investor's portfolio started at ₹5 lakhs in 2016 and grew to ₹18 lakhs by 2026 (10 years). CAGR = (18/5)^(1/10) − 1 = 13.7%. This 13.7% CAGR accounts for all market ups and downs and gives a single meaningful annualised return number to benchmark against a Nifty 50 index fund.
| Portfolio | Initial (₹) | Final (₹) | Years | CAGR |
|---|---|---|---|---|
| Conservative (debt+equity) | ₹5,00,000 | ₹12,00,000 | 10 | 9.1% |
| Balanced (50:50) | ₹5,00,000 | ₹15,00,000 | 10 | 11.6% |
| Aggressive (equity) | ₹5,00,000 | ₹18,00,000 | 10 | 13.7% |
Frequently Asked Questions
What is CAGR and why is it important for mutual fund investors?
CAGR (Compound Annual Growth Rate) is the annualised rate of return that converts an initial investment to a final value over multiple years. It smooths out year-to-year volatility and gives a single number representing the 'steady' growth rate that would produce the same result. Mutual fund fact sheets always show CAGR returns (1-year, 3-year, 5-year, since inception) to allow accurate comparisons between funds.
How is CAGR calculated?
CAGR = (Final Value / Initial Value)^(1/Number of Years) − 1. For example, if you invested ₹1 lakh and it grew to ₹2 lakhs in 5 years: CAGR = (2,00,000/1,00,000)^(1/5) − 1 = 2^0.2 − 1 = 1.1487 − 1 = 14.87%. This means the investment grew at 14.87% per year on average, compounded annually.
What is the difference between CAGR and absolute returns?
Absolute return is the total percentage gain: (Final − Initial) / Initial × 100. CAGR is the annualised version of absolute return, accounting for time. A 100% absolute return over 5 years is a 14.87% CAGR, but the same 100% return over 2 years is a 41.4% CAGR. CAGR is more useful for comparisons because it normalises for time. Absolute return is useful only when comparing investments with the same duration.
What is a good CAGR for a mutual fund in India?
For Indian equity mutual funds: a CAGR above 12% over a 10-year period is considered good; above 15% is excellent. The Nifty 50 index has delivered approximately 12–14% CAGR over most 10-year periods. Actively managed large-cap funds typically deliver 12–15% CAGR, while top mid-cap funds have delivered 15–18% CAGR. Debt funds typically deliver 6–8% CAGR.
Can CAGR be misleading?
Yes. CAGR assumes a smooth, steady growth curve and ignores the path of returns. A fund with high volatility might have the same CAGR as a stable fund but with far more risk. CAGR also ignores cash flows — it only works for a single initial investment. For SIP investments with regular contributions, use XIRR (Extended Internal Rate of Return) instead of CAGR.
How do I use CAGR to compare two mutual funds?
To compare using CAGR: (1) Note the starting NAV or value for both funds on the same date; (2) Note the current NAV; (3) Calculate CAGR for each: (Current NAV / Starting NAV)^(1/years) − 1; (4) The fund with higher CAGR has outperformed over that period. Always compare CAGR over the same period (e.g., both over 5 years) and consider risk metrics like standard deviation alongside CAGR.