Investments & Returns
CAGR Calculator
Quick answer: The FinTax24 CAGR (Compound Annual Growth Rate) Calculator computes the smoothed annual growth rate between two values over a chosen period — the standard metric for comparing investment returns, business revenue growth and macro-economic indicators. Calculator surfaces absolute change and CAGR side by side.
CAGR Calculator
Compound Annual Growth Rate of any investment.
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Disclaimer: Results are for indicative purposes only and may vary based on actual rates, rules, and policies. Please consult a FinTax24 expert for binding advice.
How to use this calculator
Follow these 4 steps for an accurate result.
- 1
Enter initial value
Type the starting / investment value at year 0.
- 2
Enter final value
Type the ending / current value.
- 3
Enter tenure
Type the period in years between the two values.
- 4
Read CAGR + absolute
Calculator surfaces CAGR, absolute return, and equivalent annualised doubling time.
Key takeaways
- CAGR = (Final / Initial)^(1 / Years) - 1 — the geometric mean return that smooths volatility.
- Absolute return = (Final - Initial) / Initial — useful for short periods.
- CAGR is preferred over average annual return because it accurately reflects compounding.
- Useful for fund selection, business growth benchmarking and equity-portfolio review.
Frequently asked questions
Quick answers to common questions about cagr calculator.
What is CAGR?
CAGR (Compound Annual Growth Rate) is the smoothed annual rate of return that grows the initial value to the final value over a given period. It assumes compounding and ignores intermediate volatility. CAGR is the standard comparison metric for funds, stocks and indices.
How is CAGR calculated?
CAGR = (Final / Initial)^(1 / Years) - 1. Example: ₹1,00,000 growing to ₹2,00,000 in 5 years has CAGR = (2.0)^(1/5) - 1 = 14.87%. Calculator applies this formula for any input pair.
CAGR vs absolute return?
Absolute return = (Final - Initial) / Initial × 100 — total gain over the period. CAGR = annualised gain assuming constant compounding. For 5-year investments, CAGR is more meaningful — it normalises returns across different tenures.
What CAGR is good for equity mutual funds?
Equity mutual funds (large-cap) delivering 11-13% CAGR over 5+ years are market-beating. Mid-cap funds 14-16% are excellent. Small-cap funds 16-20% are standout, but involve higher volatility. Always review rolling returns, not just point-to-point CAGR.
What is the difference between CAGR and IRR?
CAGR is for a single cash flow in and a single cash flow out, with no intermediate flows. IRR / XIRR works for multiple cash flows (SIP contributions + redemption), giving a more accurate personal-return metric when flows happen mid-period. Calculator uses CAGR for two-value scenarios.
Is CAGR misleading in volatile markets?
Yes — CAGR smooths volatility but ignores path dependency. A ₹1 lakh investment growing to ₹3 lakh with smooth 24.6% CAGR over 5 years is different from a ₹1 lakh investment that went to ₹5 lakh and then fell to ₹3 lakh (same CAGR but different risk profile). Always pair CAGR with rolling-return analytics.
Sources & authority: For regulations on cagr calculator, refer to gst.gov.in, mca.gov.in, incometax.gov.in, rbi.org.in, SEBI — investor education, AMFI — fund return calculation, NSE Indices — Nifty TRI.
Last reviewed by: FinTax24 Wealth Desk · Reviewed on:
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