CAGR calculator
What annual return did this investment actually deliver?
Hundo does not store when you bought it, so this one is always yours to set.
24.6%a year, compounded
- Total gain
- ₹10,00,000
- Absolute return
- 200%
- Held for
- 5 years
CAGR smooths the whole period into one annual rate. It says nothing about how bumpy the ride was, and it assumes nothing was added or withdrawn along the way.
- Started at
- Gain
| Year | Started at | Gain so far | Value |
|---|---|---|---|
| 0 | ₹5,00,000 | ₹0 | ₹5,00,000 |
| 1 | ₹5,00,000 | ₹1,22,865 | ₹6,22,865 |
| 2 | ₹5,00,000 | ₹2,75,923 | ₹7,75,923 |
| 3 | ₹5,00,000 | ₹4,66,591 | ₹9,66,591 |
| 4 | ₹5,00,000 | ₹7,04,112 | ₹12,04,112 |
| 5 | ₹5,00,000 | ₹10,00,000 | ₹15,00,000 |
You know two numbers about a holding: what you put in, and what it says on the screen today. CAGR turns that pair into the single yearly rate that would have carried the first to the second — the number you need before you can say whether the fund, the plot of land and the fixed deposit did well or badly next to each other.
A worked example
An equity fund holding bought for ₹2,00,000 that is worth ₹4,40,000 today, held for 8 years. Put those three numbers into the fields above and the answer is 10.4% a year, compounded — a total gain of ₹2,40,000 and an absolute return of 120%. (The rate is 10.36% before the display rounds it to one decimal place.)
That gap is the whole point of the page. “My money more than doubled” and “I earned 120%” are both true, and both sound like a much better decision than 10.4% a year does. The eight years are what separate them.
| CAGR | Absolute return | XIRR | |
|---|---|---|---|
| What it answers | At what steady yearly rate did this grow? | How much did it gain in total? | What rate reconciles every dated cash flow? |
| Money added later | Cannot handle it | Cannot handle it | Handles it |
| Needs exact dates | No — years only | No | Yes, every one |
| Use it for | One lumpsum, start to finish | A quick headline | SIPs, top-ups, partial exits |
If anything went in or came out mid-way, the number above this table is the wrong one to quote.
What this number does not account for
Anything you added or withdrew
One rate over one holding period is all this can see. A top-up, a partial redemption or a switch between plans breaks the assumption, and the result drifts from what you actually earned.
Tax on the way out
The value on your statement is pre-tax. What you keep depends on the asset and the holding period — section 112A for listed equity and equity funds, section 50AA for specified debt funds bought on or after 1 April 2023, and your slab where neither applies.
Inflation
This is a nominal rate. Only the part above the rise in prices grew what the money can buy, and the RBI works to a legislated inflation target rather than to zero.
Costs already inside, costs outside
A fund NAV is net of its expense ratio, so those costs are silently in the rate. Brokerage, STT, stamp duty, exit load, demat charges and a property deal’s registration and brokerage are not — unless you fold them into the value you started with.
Two more honest limits. First, part-years: the field takes whole years, so a holding of seven years and five months entered as seven will read a little high — round to the nearer year and treat the last decimal place as noise. Second, the end date you chose. Over short periods CAGR is extremely sensitive to it; the same fund measured to the month before a fall and the month after can produce two rates a reader would think belong to different investments. Over ten years or more that sensitivity fades, which is why long-period CAGRs are the ones worth comparing.
And read the table above as what it says it is: the smooth path the rate implies, not the year the money had. Nothing real climbs by the same percentage twelve months running.
Where to go next
Have a rate and want to project forward instead of backward? Lumpsum grows one amount at a rate you choose. Measuring instalments rather than one cheque? SIP is built for that shape. And before you treat the gain as yours, Capital gains puts the tax against it.
What is the difference between CAGR and absolute return?
Absolute return is the whole gain as a percentage of what you started with, however long it took. CAGR spreads that same gain over the years you held it. A holding that doubled is up 100% absolute whether it took three years or thirteen; only the CAGR tells those two apart, which is why the tool above shows both.
Can I use CAGR for a SIP?
No. CAGR assumes one amount went in at the start and nothing moved after that. A SIP is dozens of instalments, each held for a different length of time, so the right measure is XIRR — the rate that reconciles every dated cash flow. Using CAGR on a SIP by treating total instalments as the starting value overstates the return, because most of that money was not invested for the full period.
What is the CAGR formula?
Divide the ending value by the beginning value, take the nth root where n is the number of years, subtract one, and read it as a percentage. That is exactly what the calculator above does; the year-by-year table then applies that one rate repeatedly, which is why its curve is smooth.
Is a 12% CAGR good?
It depends on what the money was exposed to and what inflation did over the same years. A rate is only meaningful against a comparable alternative for the same period and the same risk, and against the RBI's inflation-targeting band, since only the part above inflation grew your purchasing power. Do not compare a three-year CAGR with a fifteen-year one and call the higher number better.
Does a negative CAGR mean anything?
Yes — enter an ending value below the beginning value and the rate comes back negative, which is the annualised rate at which the holding shrank. It is a legitimate reading, and more honest than quoting the loss as one lump.
This page starts from typical figures. In Hundo the same calculator opens on your own — the loan, the deposit, the salary already on the ledger — and says where each number came from.