CAGR vs IRR Calculator.
Use the Right Return Metric.
CAGR and IRR give different answers for the same investment. Know when to use each — and calculate the one that actually reflects your personal returns.
CAGR vs IRR: Quick Reference
CAGR
Compound Annual Growth Rate
- Single start/end value
- Lumpsum investments
- Mutual fund NAV comparison
- Simple, no cash flows
IRR / XIRR
Internal Rate of Return
- Multiple cash flows
- SIP investments
- Real estate with rent income
- Accurate personal returns
Absolute Return
Total % Gain
- Total gain without annualization
- Good for short periods (<1yr)
- Not useful for comparison
- Easy to understand
CAGR Formula
CAGR = (End Value ÷ Start Value)^(1 ÷ Years) − 1CAGR Calculator
For lumpsum investments. For SIP returns, use the SIP Calculator (which uses XIRR methodology).
CAGR Calculator Inputs
Calculate the compound annual growth rate of your investment
CAGR Results
Your investment growth analysis
Enter your investment values to calculate CAGR
Side-by-Side: CAGR vs IRR vs XIRR
| Factor | CAGR | IRR | XIRR |
|---|---|---|---|
| Cash flows | Single start/end | Multiple, equal intervals | Multiple, unequal dates |
| Use case | Lumpsum, fund NAV | Business projects, private equity | SIPs, personal portfolios |
| Excel formula | =(End/Start)^(1/n)-1 | =IRR(cash flows) | =XIRR(values, dates) |
| Dates needed | No | No (assumes equal periods) | Yes — actual dates |
| Accuracy for SIP | Misleading | Approximate | Most accurate |
| Mutual fund disclosure | Standard | Rarely used | Mandated by SEBI |
| Real estate analysis | Limited | Common | Best with actual dates |
| Complexity | Simple | Moderate | Moderate |
Real Example: Why CAGR Misleads SIP Investors
Scenario
- Mutual fund NAV: 10-year CAGR = 13%
- You ran a SIP for 10 years
- Total invested: ₹12 lakh (₹10,000/month)
- Final corpus: ₹23.5 lakh
Fund's advertised CAGR
13%
NAV growth from ₹10 to ₹34 over 10 years
Your personal XIRR
~11.2%
Actual return on your staggered SIP investments
Why the difference? Your early SIP investments (from year 1) earned 13% CAGR, but later ones had less time. The blended personal return (XIRR) is lower than the fund's NAV CAGR. Both numbers are correct — they measure different things.
Frequently Asked Questions
What is the difference between CAGR and IRR?▾
CAGR (Compound Annual Growth Rate) measures the steady-state annual growth rate of a single investment from start to end value, assuming no interim cash flows. IRR (Internal Rate of Return) is a more powerful metric that accounts for multiple cash flows at different times — making it essential for SIPs, real estate investments, or any investment with irregular deposits or withdrawals. CAGR = simple, single-investment metric. IRR = flexible, multi-cashflow metric.
When should I use IRR instead of CAGR?▾
Use IRR when: (1) You have multiple investments at different times (SIPs, monthly contributions); (2) You are evaluating real estate (purchase, rental income, and sale); (3) Comparing business projects with irregular cash flows; (4) Your investment has redemptions or withdrawals at different points. Use CAGR for: simple one-time investments, comparing mutual funds over a fixed period, or calculating what return you need to reach a goal.
What is XIRR and how is it different from IRR?▾
XIRR is IRR with actual dates (not just periods). Regular IRR assumes equally spaced cash flows (monthly, annually). XIRR takes the exact date of each cash flow — essential for SIPs where you invest on specific dates. In Excel, use XIRR for SIP returns; in Indian mutual funds, all return calculations use XIRR for accuracy.
Can CAGR and IRR give different results for the same investment?▾
Yes, significantly. For a one-time investment (lumpsum), CAGR and IRR give identical results. But for SIPs, CAGR of the NAV doesn't equal your personal IRR. Example: Nifty 50 has a 10-year CAGR of 13%, but an investor who ran a SIP in that period might have a personal XIRR of 11% or 15% depending on exactly when they invested. IRR is more accurate for actual personal returns.
What is a good CAGR for stock market investments?▾
For equity investments: 12-15% CAGR over 10+ years is excellent. Index funds (Nifty 50, S&P 500) have historically delivered 10-13% CAGR. Individual stocks: 15-20%+ CAGR over 5 years is strong. Always compare against inflation (6-7% India, 3-4% US) to see real returns. A 12% CAGR with 7% inflation = only 5% real return.
How do I calculate CAGR in Excel?▾
CAGR formula in Excel: =(End Value/Start Value)^(1/Years)-1. Example: Start = ₹1,00,000, End = ₹2,00,000, Years = 7. CAGR = (200000/100000)^(1/7)-1 = 10.41%. For SIP returns, use XIRR function in Excel with actual dates.
Related Calculators
Disclaimer: These calculators use standard financial formulas. Past CAGR does not guarantee future returns. All investments carry risk. Consult a SEBI-registered or licensed financial advisor before investing.