CAGR Calculator

CAGR (Compound Annual Growth Rate) is the most widely used metric to measure investment performance over time. It represents the rate at which an investment would have grown if it had grown at a steady rate, compounded annually. For mutual funds, CAGR smooths out year-to-year volatility and gives you a single number representing long-term performance. For example, if Nifty 50 grew from 10,000 to 25,000 in 10 years, its CAGR is 9.6% — meaning it grew at roughly 9.6% every year on a compounded basis. CAGR is different from absolute return (total % gain) and XIRR (time-weighted return for SIPs). SEBI mandates that mutual fund returns be disclosed as CAGR for periods above 1 year.

CAGR = (End Value / Start Value)^(1 / Years) - 1

Example:
Start Value: ₹1,00,000 | End Value: ₹3,00,000 | Years: 10
CAGR = (3,00,000 / 1,00,000)^(1/10) - 1 = 3^0.1 - 1 = 11.61%

CAGR

Compound Annual Growth Rate — the rate at which an investment grows annually on a compounded basis, assuming steady growth over the measured period.

Absolute Return

The total percentage gain or loss on an investment from the date of purchase to the current value, without accounting for time.

Multiplier

A ratio showing how many times the original investment has grown. A 3x multiplier means ₹1 lakh grew to ₹3 lakh.

Compounding

The process where returns earned on an investment generate further returns over time, exponentially growing wealth.