CAGR Calculator
Determine the mean annual growth rate of an investment over time.
Compound Annual Growth Rate (CAGR) is the most accurate way to measure investment performance over time. Unlike 'Absolute Return', which just tells you total profit, CAGR tells you how much your money grew every single year on average.
Why Absolute Return Lies
If you doubled your money in 10 years, your absolute return is 100%. Sounds great? But your CAGR is only 7.18%. This barely beats FD returns! CAGR reveals the truth.
Frequently Asked Questions
What is a good CAGR for stocks?
Historically, the Nifty 50 has given 12-14% CAGR. Any portfolio beating 15% CAGR over 10 years is considered excellent wealth creation.
Can CAGR be negative?
Yes, if your final value is lower than your initial investment, CAGR will be negative, indicating an annual loss rate.
Is CAGR same as XIRR?
No. CAGR is for lumpsum investments (one start point, one end point). XIRR is for SIPs or multiple transactions at different times.
Why is CAGR important?
It helps you compare different assets (e.g., Real Estate vs Stocks) on an equal footing by annualizing the returns.
How does inflation affect CAGR?
Your Real CAGR = Nominal CAGR - Inflation Rate. If your portfolio grew at 10% but inflation was 6%, your real purchasing power grew by only 4%.