How CAGR Is Calculated
CAGR = (Final ÷ Initial)1/years − 1. It answers: "what steady yearly growth rate would turn my start value into my end value?" — smoothing out all the ups and downs in between.
Example: ₹1,00,000 → ₹2,50,000 in 6 years. Absolute return is 150%, but CAGR = (2.5)1/6 − 1 ≈ 16.5% per year. That's the number to compare against a fund's benchmark, an FD rate, or inflation.
Benchmarks to judge your CAGR against (long-term, India): savings account ~3%, FD 6–7.5%, inflation ~5–6%, Nifty 50 ~12%, top equity funds 13–16%. The "Doubles every" figure uses the Rule of 72: money doubles in roughly 72 ÷ CAGR years.
For monthly SIPs use SIP Calculator (CAGR understates SIP returns), and to see what inflation does to those gains, try the Inflation Calculator.