Investment & Retirement

    CAGR Calculator

    Calculate the CAGR (Compound Annual Growth Rate) between an initial and final value over any duration.

    Inputs
    years
    Result
    CAGR
    20.11%
    • Absolute Return150%
    • Wealth Multiple2.5×

    An investment of ₹1,00,000 grew to ₹2,50,000 in 5 years — a CAGR of 20.11%.

    Step-by-step calculation
    1. CAGR = (End/Begin)^(1/years) − 1
    2. = (250000/100000)^(1/5) − 1 = 20.11%
    How this is calculated
    CAGR = (Vₙ / V₀)^(1/n) − 1
    Written by Taxpex CA Team
    Chartered Accountants (ICAI) · Reviewed by Taxpex Editorial Board
    Last updated 10 Nov 2025
    When to use this

    Is this the right calculator for you?

    • Comparing multiple investments with different tenures and end values.
    • Evaluating stock / MF / PMS performance vs benchmarks.
    • Modelling business revenue or user-growth trajectories.
    Overview

    Understanding the CAGR

    Compound Annual Growth Rate is the geometric mean annual return of an investment over a period — the single number that smooths out year-to-year volatility. CAGR = (Ending / Beginning)^(1/years) − 1. This calculator computes CAGR for any starting value, ending value and duration, and inverts it to project future value at any expected CAGR.

    Use CAGR to compare mutual funds, equities, real-estate and business revenue on an apples-to-apples basis. A ₹1 L investment growing to ₹3 L in 10 years is a 11.6% CAGR — not 20% (which the absolute return suggests).

    Worked examples

    Real-world scenarios, step-by-step

    ₹1 L → ₹3.5 L in 12 years

    Reviewing a 12-year equity mutual-fund investment.

    • CAGR = (3.5 / 1)^(1/12) − 1
    • CAGR = 1.108^0.0833 − 1 ≈ 10.98%
    CAGR ≈ 11.0% per annum.
    Pro tips

    Common mistakes to avoid

    Confusing CAGR with absolute return — a 300% absolute over 15 years is only ~9.7% CAGR.

    Using CAGR on short (<3 year) horizons — highly misleading.

    Ignoring inflation — real CAGR = nominal − inflation.

    Need a CA to review your numbers? Book a free consult — we'll double-check within 24 hours.

    CA insights

    Expert tips from senior CAs

    • Always beat 6% inflation and 7% risk-free rate for real wealth creation.

    • Use XIRR (not CAGR) for irregular SIPs / cash flows.

    Frequently asked questions

    How is CAGR different from absolute return?+

    Absolute return ignores time; CAGR normalises the return to a per-year compounded rate — the standard measure for comparing multi-year returns.

    Does CAGR account for volatility?+

    No. Two investments with the same CAGR can have very different risk profiles. Use standard deviation or drawdown alongside CAGR.

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    People also ask

    Does CAGR account for volatility?+

    No. Two investments with the same CAGR can have very different risk profiles. Use standard deviation or drawdown alongside CAGR.

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    How is CAGR different from absolute return?+

    Absolute return ignores time; CAGR normalises the return to a per-year compounded rate — the standard measure for comparing multi-year returns.

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    Does the calculator include the annual bonus?+

    The bonus / variable pay is shown separately since it is typically paid annually, not monthly.

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    Term or endowment insurance?+

    For pure risk cover, always term insurance. Endowment/ULIPs mix insurance with investment and typically deliver poor returns on both.

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    Cite this page

    This dataset is free to reference in articles, research and reports. Attribution to Taxpex Consultancy is all we ask. Data last verified 31 July 2026.

    Citation (APA)
    Taxpex Consultancy. (2026). CAGR Calculator — Taxpex. Retrieved from https://taxpex.com/tools/investment/cagr-calculator
    HTML link
    <a href="https://taxpex.com/tools/investment/cagr-calculator">CAGR Calculator — Taxpex</a> — Taxpex Consultancy