How to Use the CAGR Calculator
- Choose your mode: "Calculate CAGR" (to find the annualized growth %) or "Future Value from Target CAGR".
- Enter the Initial Investment Value in INR (e.g. ₹1,00,000).
- Enter the Final Investment Value (for CAGR mode) or Target CAGR percentage (for Future Value mode).
- Specify the total investment duration in years (e.g., 5.0 years).
- Review your exact CAGR %, total absolute gain %, absolute gain in rupees, and year-by-year portfolio progression.
CAGR Mathematical Formula Explained
The standard Compound Annual Growth Rate formula is: CAGR = [(Final Value ÷ Initial Value)^(1 ÷ n)] - 1 CAGR (%) = CAGR × 100 Where: • Final Value = Portfolio value at the end of the period • Initial Value = Starting investment amount • n = Investment tenure in years Reverse Formula (Future Value): Final Value = Initial Value × (1 + CAGR / 100)^n.
Mutual Fund 5-Year Performance
Initial Investment: ₹1,00,000 | Final Value: ₹2,00,000 | Duration: 5 Years
CAGR = (200000 / 100000)^(1/5) - 1 = (2.0)^0.2 - 1 = 1.1487 - 1 = 14.87% per year.
CAGR: 14.87% | Absolute Gain: +100.0% (₹1,00,000) | Doubling Time: ~4.8 Years
Real Estate Property Growth (10 Years)
Purchase Price: ₹35,00,000 | Sale Price: ₹85,00,000 | Duration: 10 Years
CAGR = (8500000 / 3500000)^(1/10) - 1 = (2.42857)^0.1 - 1 = 1.0928 - 1 = 9.28% p.a.
CAGR: 9.28% | Total Gain: +142.8% (₹50,00,000) | Doubling Time: ~7.8 Years
Target Future Value (Reverse CAGR Mode)
Initial: ₹5,00,000 | Target CAGR: 12.0% | Horizon: 7 Years
Final Value = 500000 × (1 + 0.12)^7 = 500000 × 2.21068 = ₹11,05,340.
Initial Investment: ₹5,00,000 | Projected Final Value: ₹11,05,340 | Total Profit: ₹6,05,340
Investing Best Practices
- ✓Use CAGR instead of Absolute Return when comparing investments with different holding periods (e.g., 50% gain in 3 years is 14.5% CAGR, whereas 50% in 5 years is only 8.4% CAGR).
- ✓CAGR assumes steady, smoothed annual growth; it does not measure intra-period risk or market drawdowns (use Standard Deviation / Sharpe Ratio alongside CAGR).
- ✓For ongoing periodic investments (like SIPs), use XIRR (Extended Internal Rate of Return) instead of CAGR.
- ✓Always compare your investment’s CAGR against standard market benchmark indices (such as Nifty 50 TRI or BSE 500).
Common Interpretation Mistakes
- ✗Using simple Average Annual Return instead of CAGR (an investment that drops 50% in Year 1 and gains 50% in Year 2 has an average return of 0%, but a CAGR of -29.3%!).
- ✗Applying CAGR to systematic monthly investments (SIPs) rather than one-time lump-sum portfolios.
- ✗Ignoring inflation and capital gains taxes when assessing net real CAGR.