CAGR (Compound Annual Growth Rate) is the most widely used metric to measure investment performance. It gives you the smoothed annualized return of an investment, making it easy to compare different investments regardless of time period. Use this calculator to find the CAGR of any investment or the future value needed to achieve your target CAGR.

CAGR Comparison Across Asset Classes

Asset Class	5 Year CAGR	10 Year CAGR	15 Year CAGR
Equity (Nifty 50)	14-16%	12-14%	13-15%
Gold	11-13%	9-11%	10-12%
Real Estate	8-12%	8-10%	8-11%
Debt / FD	6-7%	6-7%	6-7%
PPF	7.1%	7.1%	7.1%

*Historical data for illustration. Past performance does not guarantee future returns.

CAGR vs Absolute Return — Example

Investment	Period	Absolute Return	CAGR
₹1L → ₹2L	5 years	100%	14.87%
₹1L → ₹2L	10 years	100%	7.18%
₹1L → ₹4L	10 years	300%	14.87%

Same absolute return over different periods gives very different CAGR — always use CAGR for fair comparison.

How to Calculate CAGR

In plain words

CAGR (Compound Annual Growth Rate) is the geometric average annual return of an investment over a specified period. It assumes profits are reinvested and provides a smoothed annualized return rate, making it easy to compare investments across different time periods.

How the calculation works

CAGR = (FV / PV)^(1 / n) - 1

Where:
CAGR = Compound Annual Growth Rate (as decimal, × 100 for percentage)
FV = Final Value of Investment
PV = Initial Value (Principal)
n = Number of Years

A quick example

Let us calculate the CAGR for an investment that grew over 5 years:

Initial Investment:₹1,00,000

Final Value:₹2,00,000

Investment Period:5 years

Step by step

1.Divide final by initial: 2,00,000 ÷ 1,00,000 = 2.0
2.Calculate the nth root: 2.0^(1/5) = 1.1487
3.Subtract 1: 1.1487 - 1 = 0.1487
4.Convert to percentage: 0.1487 × 100 = 14.87%
5.Absolute return = (2,00,000 - 1,00,000) / 1,00,000 × 100 = 100%

So the answer is: CAGR = 14.87% per annum | Absolute Return = 100% over 5 years

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Frequently Asked Questions

What is CAGR?

CAGR (Compound Annual Growth Rate) is the average annual growth rate of an investment over a specified period, assuming the profits are reinvested.

How is CAGR calculated?

CAGR = (Final Value / Initial Value)^(1/n) - 1, where n is the number of years. It gives the smoothed annualized return.

What is a good CAGR?

A good CAGR depends on the asset class. For equity: 12-15%, for debt: 6-9%, for real estate: 8-12% over the long term.

What is the difference between CAGR and absolute return?

Absolute return shows total growth percentage without considering time. CAGR annualizes the return, making it comparable across different time periods.