How to use the CAGR calculator
- Choose what to calculate: the CAGR, the end value for a target rate, or the time needed.
- Enter the starting value of the investment.
- Enter the ending or target value, or the CAGR you expect.
- Set the holding period in years and months.
- Compare the result with an FD and inflation in the chart and insights.
CAGR formula
CAGR = (End value ÷ Start value)1 ÷ t − 1
t is the period in years; 3 years 6 months is 3.5. Reversed, the end value is Start × (1 + CAGR)t and the time needed is log(End ÷ Start) ÷ log(1 + CAGR).
Example: ₹1,00,000 growing to ₹2,50,000 in 7 years is (2.5)1/7 − 1 = 13.99% a year.
Absolute return vs CAGR
| Period | Doubled (100%) | Tripled (200%) | 5× (400%) |
|---|---|---|---|
| 3 years | 25.99% | 44.22% | 71.00% |
| 5 years | 14.87% | 24.57% | 37.97% |
| 10 years | 7.18% | 11.61% | 17.46% |
| 15 years | 4.73% | 7.60% | 11.33% |
The same absolute return means a much lower CAGR when it takes longer.
How long money takes to double
| CAGR | Exact | Rule of 72 | ₹1 lakh after 10 years |
|---|---|---|---|
| 6% | 11.9 years | 12.0 years | ₹1,79,085 |
| 8% | 9.0 years | 9.0 years | ₹2,15,892 |
| 10% | 7.3 years | 7.2 years | ₹2,59,374 |
| 12% | 6.1 years | 6.0 years | ₹3,10,585 |
| 15% | 5.0 years | 4.8 years | ₹4,04,556 |
For SIPs and irregular investments use the XIRR calculator.
Frequently asked questions
What is CAGR?
Compound annual growth rate is the steady yearly rate at which an investment would have to grow to go from its starting value to its ending value over the period, with gains reinvested. It smooths out the ups and downs along the way.
How do I calculate CAGR?
CAGR = (end value ÷ start value)^(1 ÷ years) − 1. For example, ₹1 lakh growing to ₹2.5 lakh in 7 years is a CAGR of 13.99%.
What is the difference between absolute return and CAGR?
Absolute return is the total gain as a percentage of what you started with, ignoring time. ₹1 lakh to ₹2.5 lakh is a 150% absolute return whether it took 2 years or 10. CAGR spreads it over the years, so you can compare investments held for different periods.
When should I use XIRR instead of CAGR?
CAGR works for a single investment with one start and one end value. If you invested in instalments (a SIP) or took money out along the way, use XIRR, which accounts for the date of every cash flow.
What is a good CAGR?
It depends on risk. Compare it with what a safe option earned over the same period: bank FDs have paid roughly 6–7.5% in recent years and retail inflation has averaged around 5–6%. A risky investment should beat both by a clear margin to be worth it.
Can CAGR be negative?
Yes. If the end value is below the start value, the CAGR is negative. For example, ₹1 lakh falling to ₹80,000 over 2 years is a CAGR of about −10.6%.