📈 CAGR Calculator
Calculate Compound Annual Growth Rate (CAGR) to measure investment returns over time
Investment Details
Enter investment details and click Calculate
💡 Understanding CAGR
What is CAGR?
CAGR is the average annual growth rate of an investment over a specific period, assuming profits are reinvested each year.
Why Use CAGR?
CAGR smooths out volatility and provides a realistic picture of investment performance over multiple years.
Good CAGR Range
For Indian stock market: 12-15% is considered good. For savings/bonds: 6-8% is typical. For real estate: 8-12%.
Limitations
CAGR assumes constant growth. It doesn't account for volatility, risk, or timing of cash flows.
❓ Frequently Asked Questions
What does CAGR tell us?▼
CAGR tells us the average annual return on investment. A 15% CAGR means your investment grew by an average of 15% per year.
How is CAGR different from average annual return?▼
Average annual return treats each year equally, while CAGR accounts for compound growth where profits are reinvested. CAGR is more accurate for long-term investments.
How to use CAGR for investment decisions?▼
Compare CAGR of different investments over the same period. Higher CAGR indicates better performance, but also consider risk and other factors.
Can CAGR be negative?▼
Yes, if the ending value is less than the beginning value, CAGR will be negative, indicating a loss on investment.
What's a healthy CAGR for mutual funds?▼
For equity mutual funds, 12-15% CAGR is considered good. For balanced funds, 8-10% is typical. Compare with benchmark indices for better perspective.