Calculator
CAGR Calculator
Convert any total return into an equivalent annual rate.
dhanmetrics.com · Educational illustration only · Not investment advice
Compound annual growth rate
Your annualised return
CAGR
20.11%
Equivalent annual rate over 5 years.
Absolute return
₹1,50,000
150.0%
Multiplier
2.50×
₹1,00,000 → ₹2,50,000
What this means
20.11% CAGR over 5 years turns ₹1,00,000 into ₹2,50,000 — a 2.50× multiplier. As a benchmark: bank FDs deliver ~6-7%, balanced funds ~10%, equity ~12% over rolling 15-year windows in India. Your CAGR is well above market — verify with rolling-returns to confirm it's repeatable.
CAGR assumes smooth compounding — real markets are volatile. For irregular contributions, use XIRR instead.
Adjust your scenario
Type, drag, or tap a chip — the result on the right updates instantly.
Inputs
CAGR converts any total return into an apples-to-apples annual rate — the universal benchmark for comparing investments.
Use decimals for partial years (e.g. 2.5 for 2 years 6 months).
Worked example
₹1,00,000 invested grows to ₹3,00,000 in 10 years
Absolute return: 200% · Money multiple: 3×
Tripling ₹1 lakh in 10 years works out to a CAGR of 11.61% — right in line with long-term Nifty 50 returns. Compare that to the misleading 'average return' of 20% (200% ÷ 10 years), which ignores compounding entirely.
Geometric mean, the correct way to annualise multi-year returns.
Frequently asked questions
Real answers to the questions people search before using this calculator.
What is CAGR and how is it calculated?
CAGR (Compound Annual Growth Rate) is the smoothed yearly growth rate of an investment over a period. Formula: CAGR = (Ending Value / Beginning Value)^(1/years) − 1. It assumes profits are reinvested every year, giving a single rate that's comparable across investments.
Why is CAGR more useful than absolute return?
Absolute return doesn't tell you the time taken. ₹1 lakh becoming ₹2 lakh sounds great — but in 3 years it's a stellar 26% CAGR, while in 15 years it's a mediocre 4.7%. CAGR normalises returns by time so you can compare different investments fairly.
Is CAGR the same as average return?
No. Average return is the arithmetic mean of yearly returns — it ignores compounding and overstates the truth when returns are volatile. CAGR is the geometric mean and reflects what actually happened to your money. Always prefer CAGR for multi-year investments.
When is CAGR misleading?
When returns are highly volatile, CAGR hides the journey. Two funds can both show 12% CAGR — one steady, the other swinging between +40% and −25% — and the volatile one is much riskier. Always pair CAGR with standard deviation or drawdown for a complete picture.
What's a good CAGR for equity mutual funds in India?
Long-term equity mutual funds in India have historically delivered 11–14% CAGR over 15+ year periods. Anything above 15% sustained over a decade is exceptional. Anything below 9% likely underperformed a simple index fund — a red flag worth investigating.
CAGR vs XIRR — when to use which?
Use CAGR for single lumpsum investments with one buy and one sell. Use XIRR for SIPs, multiple top-ups, or any series of irregular cash flows — XIRR handles dates and varying amounts correctly. For a SIP, CAGR is technically wrong; XIRR is the right metric.