What is a CAGR Calculator?
The CAGR (Compound Annual Growth Rate) Calculator measures the true annualised return of any investment over a specific period, smoothing out year-to-year volatility. CAGR is the most accurate way to compare investment performance across different time periods and asset classes.
Benefits of Using Rupee Logic CAGR Calculator
True Annual Return
CAGR reveals the actual annualised return, removing distortions from volatile year-to-year returns.
Asset Comparison
Compare equity, FD, gold, and real estate investments on an equal, apples-to-apples basis.
Goal Benchmarking
Check if your investments are keeping pace with inflation or generating real wealth above it.
Fund Performance
Evaluate mutual fund or stock portfolio performance using CAGR as the universal standard metric.
Frequently Asked Questions — CAGR Calculator
CAGR is calculated as: CAGR = (Final Value / Initial Value)^(1/Years) - 1. Example: ₹1 lakh growing to ₹2.5 lakh in 5 years gives CAGR = (2.5)^(0.2) - 1 = 20.11% per annum. This means the investment effectively grew at 20.11% every year on average, though actual year-by-year returns may have varied widely due to market fluctuations.
Benchmarks: Inflation CPI around 5-6% CAGR is the minimum investments must beat; Bank FD 6.5-7.5%; PPF 7.1%; Nifty 50 over 20 years approximately 12-13%; Real estate in major cities 8-12% over 10 years; Gold 10-12% over 10 years; Mid and small-cap mutual funds 14-18% over 10 years. A CAGR above 12% in equity is considered good; above 7% in debt is excellent for India.
Absolute return = (Final - Initial) / Initial × 100. For ₹1L to ₹2.5L: Absolute return = 150%. CAGR = 20.11%. The key difference is that absolute return does not account for time. A 150% absolute return in 3 years is far better than the same in 10 years. CAGR normalises for time, making it the standard metric for comparing investments of different durations.
CAGR works for single lump sum investments with one initial and one final value. IRR (Internal Rate of Return) works for multiple cash flows at different times, like SIP investments. For evaluating SIP returns, XIRR (a variant handling irregular intervals) is used. For precise SIP return calculation, use XIRR in Excel or personal finance platforms like Kuvera or Zerodha.
Note your portfolio value when you started, the current value, and number of years. Enter these in our CAGR calculator. Compare your portfolio CAGR to the Nifty 50 CAGR over the same period — the difference is your alpha. If your CAGR is lower than Nifty, consider switching to low-cost index funds which historically outperform most active investors over long periods.