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CAGR Calculator 2025 – Calculate Compound Annual Growth Rate Free | Nikunj Stock Brokers

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CAGR Calculator — Measure True Growth

Calculate the Compound Annual Growth Rate of any investment, find what CAGR you need to hit a goal, or estimate your future value. The most accurate way to compare investments.

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CAGR Calculator
Find the annual growth rate of your investment
Initial Investment Value
Amount you invested at the start
₹
₹1K₹1 Cr
Final Value
Current or maturity value of your investment
₹
₹1K₹2 Cr
Investment Duration
Number of years between initial and final value
Yr
1 Yr40 Yrs
CAGR
0%
based on current inputs
Initial Value
₹0
Final Value
₹0
Total Gain
₹0
Absolute Return
0%
CAGR vs Benchmarks
0% 15% 30%
0%
CAGR
6–7%
FD / Debt
~12%
Nifty 50 LT
~14%
Mid-cap avg
~16%
Small-cap avg
Growth Over Time
Return Comparison
Absolute Return
0%
CAGR (Annualised)
0%
Doubling Time
— yrs
10× Time
— yrs
Invest to beat the benchmark
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About CAGR

What is CAGR and Why Does It Matter?

CAGR (Compound Annual Growth Rate) is the rate at which an investment grows annually over a specified time period, assuming all profits are reinvested at the end of each year. It is the single most important metric for comparing investment performance — because it normalises returns across different time horizons, making apples-to-apples comparison possible.

The CAGR formula is: CAGR = (Final Value ÷ Initial Value)^(1÷n) − 1, where n is the number of years. For example, if you invested ₹1L and it grew to ₹3.11L over 12 years, your CAGR = (3.11)^(1/12) − 1 = 9.9% p.a. — even though the absolute return was 211%.

CAGR is used everywhere in investing: mutual fund factsheets show 1-year, 3-year, 5-year CAGR. Stock returns are quoted in CAGR. Portfolio managers are evaluated on CAGR. Understanding CAGR helps you make better investment decisions, compare fund performance objectively, and plan your long-term wealth creation strategy.

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The CAGR Formula

CAGR = (FV ÷ IV)^(1/n) − 1. It smooths out year-to-year volatility and gives a single steady-state growth rate. A fund that was up 40%, down 20%, up 25% has a CAGR very different from the arithmetic average of those returns.

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Rule of 72 — Quick Doubling

Divide 72 by the CAGR to estimate doubling time. At 12% CAGR, money doubles in ~6 years. At 8%, it takes ~9 years. At 6% (FD rate), ~12 years. This simple rule makes the cost of lower returns very clear.

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CAGR vs Absolute Return

A 100% absolute return sounds great — but over 20 years it's a 3.5% CAGR (poor). Over 5 years it's a 14.9% CAGR (excellent). Always evaluate investments using CAGR, never absolute return alone.

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CAGR vs IRR

CAGR works for single lumpsum investments. For SIPs and irregular cash flows, use XIRR (Extended Internal Rate of Return) instead. XIRR accounts for the timing of each cash flow — making it the right metric for SIP performance evaluation.

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Goal-Based CAGR Planning

Use the Goal CAGR mode to find the annual return your investment must deliver to hit a target. If the required CAGR seems too high, you either need to invest more, reduce the goal, or extend the timeline.

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CAGR Limitations

CAGR assumes a smooth, linear growth path. It doesn't capture year-to-year volatility. A fund with 40% CAGR might have had −35% in one year. Always read CAGR alongside standard deviation and Sharpe ratio for complete risk assessment.

Reference

Typical CAGR by Asset Class in India

Asset Class / CategoryTypical Long-Term CAGRRisk LevelBest Suited For
Savings Account3–4% p.a.NegligibleEmergency fund, short-term liquidity
Fixed Deposit (FD)6–7.5% p.a.Very LowCapital preservation, short-term goals
Debt Mutual Funds6–8% p.a.Low–MediumShort to medium term (1–3 years)
PPF (Public Provident Fund)7.1% (current rate)Very LowTax-free retirement savings, 15-year lock-in
Nifty 50 Index Fund~11–12% p.a. (LT)ModeratePassive long-term wealth creation (7+ years)
Large-Cap Equity Funds11–13% p.a. (LT)Moderate–HighLong-term goals (5–10+ years)
Mid-Cap Equity Funds13–16% p.a. (LT)HighAggressive long-term wealth creation (7+ years)
Small-Cap Equity Funds14–18% p.a. (LT)Very HighHigh-risk, high-reward long-term investing (10+ years)
Gold (via Gold ETF / SGBs)8–10% p.a. (20yr avg)ModerateInflation hedge, portfolio diversification
Real Estate (residential)7–9% p.a. (avg)Medium–HighLong-term, illiquid investment with rental income

* Historical CAGR figures are approximate and based on long-term averages. Past performance does not guarantee future returns. Mutual fund returns are market-linked and subject to risk.

FAQ

Frequently Asked Questions

Everything about CAGR, investment returns, and Nikunj.

CAGR (Compound Annual Growth Rate) is the rate at which an investment grows annually over a specified period, assuming profits are reinvested each year. It is the most accurate and widely-used metric to measure investment performance, as it normalises returns across different time periods and smooths out year-to-year volatility.
CAGR = (Final Value ÷ Initial Value)^(1 ÷ n) − 1, where n is the number of years. For example: ₹1L invested, grew to ₹2.5L in 10 years → CAGR = (2.5)^(0.1) − 1 = 9.6% p.a. To express as a percentage, multiply by 100.
Absolute return is the total percentage gain (e.g. "I made 150% on this investment") without considering how long it took. CAGR converts that into an annual rate, making comparison fair. A 150% absolute return over 20 years is only a 4.6% CAGR — barely beating inflation. The same 150% over 5 years is a 20.1% CAGR — excellent. Always use CAGR to compare different investments.
XIRR (Extended Internal Rate of Return) is the correct metric for investments with multiple irregular cash flows — like SIPs. CAGR works for single lumpsum investments (one cash in, one cash out). XIRR accounts for the exact dates and amounts of every transaction, making it far more accurate for evaluating SIP portfolio performance. Most mutual fund apps show XIRR as the return for SIP investments.
The Rule of 72 is a quick mental formula to estimate how long it takes money to double at a given CAGR: Doubling Time (years) = 72 ÷ CAGR%. At 12% CAGR, money doubles in 6 years. At 9%, it takes 8 years. At 6% (typical FD), it takes 12 years. This rule makes the long-term cost of settling for lower returns very tangible.
A good CAGR is one that exceeds the benchmark index over the same period. For equity funds, a CAGR above the Nifty 50's long-term average of ~11–12% is considered strong. Large-cap funds delivering 12–14% and mid-cap/small-cap funds delivering 14–18% CAGR over 10+ years are historically well-performing. However, higher CAGR generally comes with higher volatility — always assess risk alongside returns.
Yes. If the final value is less than the initial investment, the CAGR will be negative — indicating an overall loss on an annualised basis. For example, if ₹1L invested fell to ₹70,000 over 5 years, CAGR = (0.7)^(0.2) − 1 = −6.9% p.a. A negative CAGR means the investment eroded wealth rather than created it.
Mutual fund returns are typically reported as CAGR for lumpsum investments (1-year, 3-year, 5-year, 10-year, since inception) and XIRR for SIP investments. Factsheets show point-to-point NAV growth. Returns are shown as Direct plan returns — which are higher than Regular plan returns due to lower expense ratios. Always compare fund returns against their benchmark index and category average.
Key factors include: the fund manager's stock selection skill (alpha generation), market cycles during the investment period, the fund's expense ratio (lower expense = higher returns passed to investor), the investment category (small-cap > large-cap in returns and risk), and the entry/exit timing. For index funds, CAGR closely tracks the index's own CAGR minus the expense ratio.
The Nifty 50 has delivered approximately 11–12% CAGR over long periods (15–25 years). However, returns vary significantly by entry point and time period. Over 5-year rolling periods, Nifty 50 has delivered anywhere from negative returns to 20%+ CAGR. The longer the holding period, the more consistent and positive the CAGR tends to be — which is why equity investing requires patience.
Calculate the CAGR of each investment over the same time period and compare directly. For example: Fund A grew ₹1L to ₹3.5L in 10 years (CAGR: 13.3%) vs Fund B grew ₹1L to ₹3L in 10 years (CAGR: 11.6%). Fund A has higher CAGR. But also compare their risk metrics (standard deviation, maximum drawdown, Sharpe ratio) to ensure the higher return wasn't achieved through excessive risk-taking.
For a diversified equity mutual fund portfolio held for 10+ years in India, a CAGR of 11–14% p.a. is a realistic long-term expectation based on historical data. Higher allocations to mid/small-cap funds may deliver higher CAGR but with more short-term volatility. We recommend planning conservatively at 10–12% for large-cap/index funds and 12–14% for diversified multi-cap strategies.
Nikunj Stock Brokers Ltd is a full-service, fee-based stock broking house established in 1994 and headquartered in Delhi. For over 25 years, Nikunj has helped Indian investors trade and invest across equities, F&O, commodities, mutual funds and IPOs — with a client-first, conflict-free advisory model.
Yes. Nikunj Stock Brokers Ltd is fully regulated by SEBI (Reg. No. INZ000169335), and is a member of NSE (06913), BSE (6645) and MCX (16505). NSDL DP ID: IN302994, CDSL DP ID: 100300. All client funds are held in segregated accounts under full SEBI compliance.
Yes. Nikunj offers 3,500+ direct mutual fund schemes at zero commission through our web and mobile platforms. You can invest a lumpsum or start a SIP from ₹100/month in just a few clicks. All major fund houses including SBI, HDFC, ICICI Prudential, Axis, Mirae Asset, Kotak, Nippon and more are available.
The process is 100% digital and paperless. You need your PAN card, Aadhaar (for e-KYC via OTP), and bank account details. It takes under 5 minutes on our website or mobile app. Once approved, you can start investing the same day in equities, F&O, mutual funds, commodities and IPOs.
Call: 011-47030000-01 (Kamla Nagar) or 011-49863108 (Barakhamba Road). Email: info@nikunjonline.com (general), sales@nikunjonline.com (new accounts). Grievances: ig.nikunj@nikunjonline.com or 8700240043. You can also raise complaints on SEBI SCORES at scores.sebi.gov.in or Smart ODR at smartodr.in.

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