CAGR calculator: check a fund's return in three steps

What the calculator does

The CAGR calculator turns two values and a time span into one number: the constant yearly growth rate that would take the first value to the second. It has three inputs.

1. Initial value (₹): what you started with. For a fund, the NAV on the start date works as well as a rupee amount.
2. Final value (₹): what it was worth at the end, in the same unit.
3. Duration: the number of years between the two dates.

The result is shown as CAGR, green if positive and red if negative. It needs a positive initial value to work.

A worked example from a real fund

Take the BANDHAN Nifty 50 Index Fund, Direct plan, Growth option, scheme 118482. Its NAV history gives:

Step 1: enter the NAVs. Initial value 37.9723, final value 53.3701.

Step 2: set the duration to 5 years, since 3 November 2021 to 3 November 2026 is exactly five years.

Step 3: read the result. The calculator shows 7.04%. The fund page lists a 5-year return of 7.05%; the small difference comes from how the page counts the exact number of days.

The same steps give other windows from the table:

Put ₹1,00,000 into the fund on 3 November 2021 and it would be worth ₹1,40,550 on 3 November 2026. That is a total gain of 40.55%, which equals 7.04% a year compounded: ₹1,00,000 × 1.0704⁵ ≈ ₹1,40,550.

Three mistakes the calculator saves you from

1. Dividing the total gain by the years. 40.55% ÷ 5 = 8.11% a year, which overstates the true 7.04%. The longer the period and the higher the return, the larger this error grows. We cover the gap in CAGR vs absolute return.

2. Counting the years wrongly. The duration is a count of years between two dates, not the number of calendar years you touch. Using 4 years for the same NAVs gives 8.88% and using 6 gives 5.84%, so a one-year slip moves the answer by more than a point.

3. Reading a CAGR as a smooth ride. The 7.04% is an average that hides the path. Four years in, on 3 November 2025, the same ₹1,00,000 had grown to ₹1,50,751, a CAGR of 10.81%. The last year then took it back to ₹1,40,550. A CAGR uses only the two end points, so the same 7.04% could come from a steady climb or from a rise and a fall. For the path, use the NAV chart and max drawdown on the fund page.

When CAGR is the wrong tool

• SIPs and any series of cash flows. CAGR assumes a single investment. For a SIP use the XIRR calculator.
• Periods under a year. A return shorter than a year should be shown as an absolute return. Annualising it overstates how repeatable it is; see annualising a short return.
• Comparing different risk. Two funds with the same CAGR can have very different falls along the way. Compare the drawdown and volatility next to the return.

A quick way to check any return you are quoted

If someone quotes a return, ask for the start value, end value and number of years, then enter them. If the calculator gives a rate that differs from the one quoted, one of the three inputs differs from what you assumed. That single check catches many mistakes in quoted returns.