How to use this CAGR calculator
- Choose what to find: the CAGR, the ending value, or the time needed.
- Enter the starting value: what you invested, or what the asset was worth at the start.
- Enter what you know. To find the CAGR, enter the ending value and the period. To find the ending value, enter a CAGR and the period. To find the time, enter a target value and a CAGR.
- Use months for part years. 6 years and 6 months is 6 in the years box and 6 in the months box.
The result shows the CAGR, the absolute return, the total gain and the simple yearly average, with a table of the value at each year at that CAGR. A real investment rarely grows so evenly: the table shows the steady path that leads to the same end.
The CAGR formula
CAGR stands for compound annual growth rate. It answers one question: what steady yearly rate would take this starting value to this ending value over this period? It is the fairest quick way to compare investments held for different lengths of time.
CAGR = (End ÷ Start)1 ÷ years − 1 Rearranged, the ending value is Start × (1 + CAGR)years, and the years needed are ln (End ÷ Start) ÷ ln (1 + CAGR). The calculator uses all three. For part years, it counts each month as one twelfth of a year.
Worked example
You invested ₹5,00,000 in a mutual fund, and 7 years later it is worth ₹12,00,000. End ÷ start is 2.4. Raised to the power of 1 ÷ 7, that is 1.1332, and subtracting 1 gives a CAGR of 13.32%.
Your absolute return is 140% and your gain is ₹7,00,000. Dividing 140% by 7 gives 20% a year, which sounds much better than 13.32%, but it isn't what happened. At 13.32%, the value goes from ₹5,00,000 to ₹5,66,612 after a year, ₹9,34,436 after five and ₹12,00,000 after seven.
Finding the ending value or the time
The calculator also works the other way. Use it for a goal, with a CAGR you think is realistic, and try a lower one too, because market returns are not guaranteed.
- Ending value: ₹5,00,000 growing at 12% a year for 7 years reaches ₹11,05,341. ₹20,00,000 growing at 10% a year for 15 years reaches ₹83,54,496.
- Time needed: at 12% a year, ₹5,00,000 takes 7 years and 9 months to reach ₹12,00,000, and 14 years and 2 months to reach ₹25,00,000.
A quick mental check is the rule of 72: divide 72 by the CAGR to estimate the years money takes to double. It is close in the range most Indian investors look at:
| CAGR | Rule of 72 | Actual time to double |
|---|---|---|
| 6% | 12 years | 11 yrs 11 mos |
| 8% | 9 years | 9 yrs |
| 10% | 7.2 years | 7 yrs 3 mos |
| 12% | 6 years | 6 yrs 1 mo |
| 15% | 4.8 years | 5 yrs |
CAGR, absolute return and average return
These three numbers answer different questions, and mixing them up makes returns look better or worse than they were.
| Measure | What it tells you | ₹5 lakh to ₹12 lakh in 7 years |
|---|---|---|
| Absolute return | Total growth, ignoring time | 140% |
| Simple yearly average | Absolute return ÷ years, ignoring compounding | 20% |
| CAGR | The steady yearly rate that gives the same end | 13.32% |
Absolute return ignores time. A 100% return sounds the same whether it took 5 years or 15, but those are very different results:
| ₹1,00,000 becomes ₹2,00,000 in | Absolute return | Simple average | CAGR |
|---|---|---|---|
| 5 years | 100% | 20% | 14.87% |
| 7 years | 100% | 14.29% | 10.41% |
| 10 years | 100% | 10% | 7.18% |
| 15 years | 100% | 6.67% | 4.73% |
A simple average ignores compounding, and it hides losses. Suppose ₹1,00,000 rises 50% in one year to ₹1,50,000, then falls 50% the next to ₹75,000. The average of +50% and -50% is 0%, yet you have lost ₹25,000. The absolute return is -25% and the CAGR is about -13.4% a year. CAGR tells the truth here because it looks only at where you started and where you ended.
This is why CAGR is the better way to compare. Fund A turned ₹1,00,000 into ₹1,50,000 in 3 years, a 50% absolute return. Fund B turned ₹1,00,000 into ₹3,00,000 in 10 years, a 200% absolute return. B looks four times better, yet A grew faster: its CAGR is 14.47% against 11.61% for B.
What CAGR means in practice
Small differences in CAGR add up. Here is what ₹1,00,000 becomes over 10 years:
| CAGR | Value after 10 years | Absolute return |
|---|---|---|
| 8% | ₹2,15,892 | 115.89% |
| 10% | ₹2,59,374 | 159.37% |
| 12% | ₹3,10,585 | 210.58% |
The same idea works for anything with a start and an end. A flat bought for ₹40 lakh and sold for ₹65 lakh six and a half years later grew at 7.76% a year, before stamp duty, maintenance and rent. A share that fell from ₹10 lakh to ₹8 lakh in 3 years has a CAGR of -7.17%, and it now needs a 25% rise just to get back.
It also puts fixed returns on the same footing. A National Savings Certificate turning ₹1,00,000 into ₹1,44,903 in 5 years is a 7.7% CAGR, and a Kisan Vikas Patra doubling in 9 years and 7 months is a 7.5% CAGR.
Why CAGR doesn't work for SIPs
CAGR needs one starting amount and one ending amount. That is right for a lumpsum investment left alone. A SIP is different: each instalment goes in on a different date and is invested for a different time, so there is no single starting value.
Treating the total invested as the starting value gives the wrong answer. Say ₹10,000 a month for 10 years, ₹12,00,000 in all, reaches ₹23,23,391 at an assumed 12% a year. A CAGR on those two figures comes to only 6.83%, because it pretends all the money was invested from day one. The right tool for many deposits on different dates is XIRR. The same goes for any investment where you added or took out money along the way.
What CAGR leaves out
- The path. Two funds with the same CAGR can have very different ups and downs. CAGR says nothing about risk.
- Dates. The result depends on where you start and stop. One good or bad year at either end can move it a lot, so try different periods.
- Short periods. Under a year, CAGR assumes the same pace would continue for a full year. ₹2,00,000 growing to ₹3,50,000 in 8 months is a 75% gain, but a CAGR of 131.5%, which says little. Over 2 years and 6 months, the same gain is a CAGR of 25.09%. For periods under a year, the absolute return is usually more honest.
- The future. A past CAGR is not a forecast. Market-linked returns are not guaranteed and vary from year to year.
- Tax and costs. CAGR is usually quoted before tax and costs, so use what you actually received. For equity mutual funds in 2026-27, units held for more than 12 months are taxed at 12.5% on long-term gains above ₹1.25 lakh a year, and shorter holdings at 20%.
- Inflation. Subtracting inflation roughly gives your real growth. Try the inflation calculator to see what a future amount is worth today.
To see how compounding frequency changes a result, use the compound interest calculator.
Frequently asked questions
What is CAGR?
How do you calculate CAGR?
What is the difference between CAGR and absolute return?
Why is CAGR lower than the average return?
Can I use CAGR for a SIP?
How long does money take to double at 12%?
What is a good CAGR?
Sources and further reading
Independent, official guidance on this topic. Rules differ by country, so check the regulator where you live.
- SEBI investor education: mutual funds and SIPs · Securities and Exchange Board of India
This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.