Indian Company Master Data Made Simple
CAGR Calculator
Free CAGR calculator to find compound annual growth rate, absolute return and growth multiple for any investment, fund or business metric
Includes FY 2025-26 PPF and EPF benchmark rates
Investment Details
CAGR shows the annual growth rate of your investment over a specific period, accounting for compounding. It provides a smoothed annual rate of return.
CAGR Formula:
CAGR = [(Ending Value / Beginning Value)^(1/n)] - 1
Where n = Number of years
CAGR Results
Detailed Analysis
Calculation Steps:
CAGR = [(2,50,000 / 1,00,000)^(1/5)] - 1
CAGR = [2.5000^0.2000] - 1
CAGR = 1.2011 - 1
CAGR = 0.0000 or 0.00%
Understanding the Results:
• CAGR: Smoothed annual growth rate
• Absolute Return: Total percentage gain/loss
• Growth Multiple: How many times your investment grew
• A CAGR of 15%+ is generally considered excellent for equity investments
CAGR Calculator: Investment Growth Analysis Guide
A CAGR (Compound Annual Growth Rate) Calculator is a sophisticated financial tool that measures the smoothed annual growth rate of investments over time, accounting for the compounding effect. Unlike simple returns that can be misleading for multi-year investments, CAGR provides the "true" annualized rate at which an investment would have grown if it compounded steadily each year—making it the gold standard metric for comparing investment performance across different time periods and asset classes.
Understanding CAGR is essential for investors, financial analysts, portfolio managers, and business professionals to evaluate historical returns, project future growth, compare mutual fund performance, analyze stock market trends, and make informed allocation decisions. CAGR eliminates volatility noise by smoothing out year-to-year fluctuations, providing a single, standardized annual growth rate. For example, an investment that grows from ₹1 lakh to ₹2 lakhs in 5 years has a CAGR of 14.87%—meaning it grew at an average of 14.87% per year when compounded, even if actual yearly returns varied significantly.
This free CAGR Calculator provides instant calculations with detailed breakdowns showing beginning value, ending value, total gain, absolute return, CAGR percentage, and growth multiple. Whether you're evaluating mutual fund track records, comparing stock performance, analyzing real estate appreciation, measuring business revenue growth, or projecting retirement corpus accumulation, CAGR offers the most accurate and standardized metric for time-adjusted performance analysis and strategic financial planning.
Understanding CAGR Components
Beginning Value (Initial Investment)
The Beginning Value is the starting amount invested or the initial valuation at the beginning of the measurement period. For investments, it's the purchase price including all costs. For business metrics, it could be starting revenue, user base, or assets under management. Accurate beginning value is critical—using gross returns instead of net invested amount inflates CAGR artificially. Always include transaction costs, fees, and taxes in beginning value for realistic performance measurement.
Ending Value (Final Value)
The Ending Value represents the final worth at the end of the measurement period—current market value for ongoing investments or sale proceeds for exited positions. Include all accumulated returns, dividends, interest, and capital appreciation. For rental properties, add total rental income collected to current property value. For businesses, it's the final revenue, valuation, or asset figure. Ending value should reflect comprehensive total returns, not just capital gains.
Number of Years (Time Period)
The Number of Years is the duration between beginning and ending measurements, typically in years (can use decimals like 3.5 for 3.5 years). Time is crucial in CAGR calculation—longer periods generally smooth out volatility better. For comparing investments, use identical time periods. CAGR becomes more meaningful with 3+ year periods; shorter durations may not capture full market cycles or compounding benefits, making CAGR less representative of sustained performance.
CAGR Percentage
CAGR Percentage is the smoothed annual growth rate, calculated as [(Ending Value ÷ Beginning Value)^(1 ÷ Years) - 1] × 100. It answers: "At what constant annual rate would my investment have grown to reach the ending value?" For example, 12% CAGR means your investment effectively grew 12% per year when compounded, regardless of actual yearly volatility. CAGR above 12-15% is excellent for equity investments; 6-8% is good for debt; 4-6% is typical for real estate.
Absolute Return (Total Return)
Absolute Return is the total percentage gain or loss over the entire period, calculated as [(Ending Value - Beginning Value) ÷ Beginning Value] × 100. Unlike CAGR which is annualized, absolute return shows aggregate performance. For example, doubling money (100% absolute return) in 3 years equals 26% CAGR, while in 10 years it's only 7.18% CAGR. Absolute return doesn't account for time—two investments with 50% returns look identical until you discover one took 2 years (CAGR 22.5%) and another took 8 years (CAGR 5.2%).
Growth Multiple
Growth Multiple shows how many times your investment grew, calculated as Ending Value ÷ Beginning Value. A 2x multiple means you doubled money; 3x means tripled; 0.5x means lost half. Growth multiples provide intuitive understanding—10x sounds impressive, but achieving it in 30 years (CAGR 7.9%) is less impressive than 3x in 5 years (CAGR 24.6%). Combines with time period to determine CAGR: higher multiples over shorter periods indicate superior performance and capital efficiency.
How to Use This CAGR Calculator
- Enter Beginning Value: Input the initial investment amount or starting valuation in rupees. For stock/mutual fund investments, use the total purchase amount including brokerage and fees. For business metrics, use starting revenue, subscribers, or asset value. Ensure consistency—if measuring portfolio CAGR, use total portfolio value at start, not just new capital deployed.
- Input Ending Value: Enter the final value or current market worth. For ongoing investments, use present market value. For completed investments, use net proceeds after exit costs. Include all returns—capital appreciation, dividends, interest, rental income. For accurate CAGR, ending value must reflect comprehensive total returns including reinvested income and compounding effects.
- Specify Number of Years: Enter the exact duration between beginning and ending measurements. Can use decimals for precision (e.g., 3.5 years, 7.25 years). Calculate precisely using dates if needed—from Jan 1, 2018 to July 1, 2023 is 5.5 years. Accurate time measurement is critical; small errors in duration significantly impact CAGR calculation, especially for high-growth investments.
- Review CAGR Results: Instantly view your CAGR Percentage (annual compounded growth rate), Total Gain/Loss (absolute monetary profit), Absolute Return (total percentage gain), and Growth Multiple (how many times investment grew). Green indicates positive growth; red indicates losses. Compare your CAGR against relevant benchmarks for performance assessment.
- Understand CAGR vs Absolute Return: CAGR is time-adjusted; absolute return is not. 100% absolute return over 3 years (CAGR 26%) is far superior to 100% over 10 years (CAGR 7.2%). Always prioritize CAGR over absolute returns when comparing investments of different durations. CAGR enables apples-to-apples comparison across varying time horizons.
- Benchmark Against Standards: Compare your investment CAGR against appropriate benchmarks—equity funds against Nifty 50 (12-13% historical CAGR), debt funds against bank FD rates (6-7%), real estate against REITs (8-10%), gold against inflation (6%). Consistently underperforming benchmark CAGR suggests reallocation to passive index funds may yield better risk-adjusted returns with lower fees.
Practical Example: Comparing Mutual Fund Performance Using CAGR
Scenario: Amit is reviewing his mutual fund portfolio after 7 years and wants to calculate CAGR for each fund to identify top performers and decide rebalancing strategy. He invested ₹1,00,000 each in four different funds in January 2017, and it's now January 2024.
| Mutual Fund | Investment (2017) | Current Value (2024) | Absolute Return % | CAGR (7 years) | Growth Multiple |
|---|---|---|---|---|---|
| Large Cap Equity Fund | ₹1,00,000 | ₹2,21,068 | 121.07% | 11.71% | 2.21x |
| Mid Cap Equity Fund | ₹1,00,000 | ₹2,66,002 | 166.00% | 14.95% | 2.66x |
| Debt Fund | ₹1,00,000 | ₹1,60,578 | 60.58% | 7.00% | 1.61x |
| Hybrid Fund (60:40) | ₹1,00,000 | ₹1,98,979 | 98.98% | 10.50% | 1.99x |
Key Insights:
- Mid Cap leads with 14.95% CAGR: Despite higher volatility, mid cap fund delivered superior compounded returns, turning ₹1 lakh into ₹2.66 lakhs (2.66x). The 14.95% CAGR significantly outperformed Nifty 50's ~12% historical average, justifying higher risk exposure for long-term investors with 7+ year horizons.
- Large Cap provides stable 11.71% CAGR: While below mid cap, large cap fund's 11.71% CAGR represents solid performance close to equity benchmarks with lower volatility. The 2.21x growth over 7 years demonstrates consistent wealth creation suitable for moderate risk tolerance investors seeking balanced growth with stability.
- Debt fund's 7% CAGR beats FD marginally: The 7% CAGR exceeds typical bank FD rates (6-6.5%) and inflation (~6%), preserving purchasing power. However, the modest 1.61x growth over 7 years highlights debt instruments' role in stability rather than aggressive wealth creation—suitable for emergency funds and short-term goals.
- Hybrid fund balances risk-return at 10.50% CAGR: The 60:40 equity-debt allocation delivered 10.50% CAGR, nearly doubling money (1.99x) with lower volatility than pure equity. This balanced approach suits investors seeking equity-like returns with debt-like stability, ideal for approaching retirement or medium-term goals (5-10 years).
- Absolute returns misleading without time context: Mid cap's 166% absolute return sounds vastly better than debt's 60.58%, but the 7.95 percentage point CAGR difference (14.95% vs 7%) more accurately reflects the performance gap. CAGR provides standardized comparison essential for allocation decisions across mixed portfolios.
Portfolio Strategy Recommendation: Amit should increase mid cap allocation by 5-10% from debt and hybrid funds, given strong 7-year track record above benchmark and continuing long investment horizon (15+ years to retirement). However, maintain minimum 20% in debt for stability and emergency fund requirements. Rebalance annually: book profits when equity CAGR exceeds 15% (overvalued markets), shift to debt; buy equity when CAGR dips below 10% (market corrections). Review fund manager changes, expense ratios, and rolling 3-year CAGRs quarterly to ensure consistent performance continuation.
Why CAGR Calculator Matters
- Accurate Performance Measurement: CAGR provides the only true apples-to-apples comparison for investments held over different time periods. Eliminates misleading absolute return comparisons where 50% gain in 2 years (CAGR 22.5%) vastly outperforms 80% gain in 10 years (CAGR 6.1%), though absolute returns suggest otherwise. Essential for portfolio analysis and manager evaluation.
- Smooths Out Volatility: CAGR neutralizes year-to-year fluctuations, revealing underlying growth trends. An equity fund showing +30%, -10%, +40%, -5%, +25% over 5 years appears erratic, but CAGR of 14.2% demonstrates strong steady compounded growth despite volatility. Helps investors maintain discipline during market swings by focusing on long-term CAGR targets rather than short-term fluctuations.
- Benchmark Comparison Standard: Financial industry universally uses CAGR for performance reporting, making it essential for evaluating mutual funds, stocks, indices, and alternative investments against benchmarks. Compare your equity fund's 10-year CAGR against Nifty 50's 12% to determine if active management justifies higher expense ratios, or if passive index investing offers better risk-adjusted returns.
- Future Projection Tool: CAGR enables realistic wealth projection. If SIP delivers 13% historical CAGR, project future corpus assuming similar rates. However, remember: past CAGR doesn't guarantee future performance, especially for shorter measurement periods. Use conservative CAGR assumptions (10-11% for equity, 6-7% for debt) for financial planning to avoid overestimating retirement corpus or goal achievement timelines.
- Business Growth Analysis: Beyond investments, CAGR measures business revenue growth, customer acquisition, market share expansion, and asset accumulation. Company growing revenue from ₹10 crores to ₹50 crores in 5 years (CAGR 37.97%) demonstrates explosive growth trajectory valuable for M&A valuations, investor pitches, and strategic planning. CAGR provides standardized growth metrics across industries and company sizes.
- Identify Sustainable Returns: Distinguishing between lucky short-term gains and sustainable long-term performance requires CAGR analysis across multiple periods. Fund showing 30% CAGR over 3 years may be riding bull market; if 10-year CAGR is 12%, long-term performance is merely average. Always evaluate rolling 3-year, 5-year, and 10-year CAGRs to assess consistency and manager skill versus market timing luck.
Frequently Asked Questions
CAGR Formula: CAGR = [(Ending Value ÷ Beginning Value)^(1 ÷ Number of Years) - 1] × 100
Step-by-step example: Investment grows from ₹50,000 to ₹1,25,000 in 6 years
- Calculate growth ratio: ₹1,25,000 ÷ ₹50,000 = 2.5
- Calculate exponent: 1 ÷ 6 = 0.1667
- Apply power: 2.5^0.1667 = 1.1654 (use calculator with power function)
- Subtract 1: 1.1654 - 1 = 0.1654
- Convert to percentage: 0.1654 × 100 = 16.54%
Result: CAGR = 16.54% per year
Verification: ₹50,000 × (1.1654)^6 = ₹1,25,000 ✓
The investment grew at an average compounded rate of 16.54% annually, even if actual yearly returns varied significantly.
CAGR (Compound Annual Growth Rate): Geometric mean accounting for compounding. Formula: [(End÷Start)^(1÷Years) - 1] × 100
Average Annual Return: Arithmetic mean of yearly returns. Formula: Sum of annual returns ÷ Number of years
Key difference example: Investment performance over 3 years: Year 1: +30%, Year 2: -10%, Year 3: +20%
- Average Annual Return: (30% - 10% + 20%) ÷ 3 = 13.33%
- Actual performance: ₹100 → ₹130 → ₹117 → ₹140.40
- CAGR: [(140.40 ÷ 100)^(1÷3) - 1] × 100 = 12.01%
Why CAGR is lower: Average return ignores negative compounding effects. Losing 10% in Year 2 from ₹130 (loses ₹13) hurts more than gaining 10% on ₹100 (gains ₹10). CAGR accounts for this asymmetry.
Use CAGR for: Investment performance reporting, comparing funds, projecting future returns. Use Average Return for: Quick estimates, understanding volatility, academic discussions—but never for actual performance measurement.
Indian Market CAGR Benchmarks:
Equity Investments:
- Nifty 50 Index: 12-13% CAGR historically (1995-2024)
- Large Cap Equity Funds: 11-14% CAGR (good), 14-16% (excellent), 16%+ (exceptional)
- Mid/Small Cap Funds: 13-17% CAGR (good), 17-20% (excellent), 20%+ (exceptional but rare)
- Direct Stocks: 15-20% CAGR achievable with skill; 20%+ is Warren Buffett territory
Debt & Hybrid Investments:
- Bank Fixed Deposits: 6-7% CAGR (risk-free benchmark)
- Debt Mutual Funds: 7-9% CAGR (good), 9-10% (excellent)
- Hybrid Funds (Balanced): 9-12% CAGR depending on equity allocation
Alternative Assets:
- Real Estate: 8-12% CAGR (location-dependent, including rental income)
- Gold: 8-10% CAGR historically; volatile short-term, inflation hedge long-term
- PPF/EPF: 7.1-8.25% CAGR (PPF 7.1%, EPF 8.25% for FY 2025-26; tax-free, government-backed)
Context matters: 10% CAGR is excellent for debt funds but mediocre for equity funds. Always compare against appropriate benchmarks and adjust for risk—12% CAGR with 5% volatility beats 14% CAGR with 20% volatility for risk-averse investors.
Yes, CAGR can be negative, indicating your investment declined at a compounded annual rate over the period.
Example: ₹2,00,000 investment becomes ₹1,50,000 in 4 years
- CAGR = [(1,50,000 ÷ 2,00,000)^(1÷4) - 1] × 100
- CAGR = [(0.75)^0.25 - 1] × 100 = -6.94%
This means your investment lost an average of 6.94% per year when compounded—you lost 25% total, but annualized is -6.94%.
Common causes of negative CAGR:
- Market crashes: 2008 financial crisis, 2020 COVID crash caused temporary negative CAGRs
- Poor fund selection: Choosing underperforming funds or weak stocks
- High-risk investments gone wrong: Startup investments, penny stocks, cryptocurrency speculation
- Timing issues: Investing at market peaks, measuring during troughs
Perspective matters: Nifty 50 showing -3% CAGR over 3 years (2019-2022 measured badly) doesn't mean Indian equities are bad—extend to 10-year CAGR and it's +12%. Short measurement periods during downturns create misleadingly negative CAGRs. Always evaluate multiple time horizons (3-year, 5-year, 10-year rolling CAGRs) before judging investment quality.
Minimum recommended periods:
- Equity investments: 5-10 years minimum for meaningful CAGR. Equity volatility makes shorter periods unreliable—3-year CAGR might capture only bull or bear market, not full cycle.
- Debt investments: 3-5 years sufficient. Lower volatility means CAGR stabilizes faster.
- Real estate: 7-10 years ideal. Property markets move slowly; shorter periods miss appreciation cycles.
- Business metrics: 5+ years for revenue/profit CAGR. Captures multiple business cycles and sustainable growth trends.
Why longer is better:
- Smooths volatility: 1-year CAGR could be +40% (bull market) or -20% (bear market). 10-year CAGR normalizes to ~12% reflecting true performance.
- Captures full market cycles: Equity markets run in 3-7 year bull/bear cycles. Measuring only within bull market inflates CAGR; bear market deflates it. Longer periods capture complete cycles.
- Reflects compounding power: Compounding benefits amplify over time. 3-year CAGR of 12% grows ₹1L to ₹1.40L; 10-year same CAGR reaches ₹3.11L—more than double the multiplier.
Rolling CAGR analysis: Professional investors evaluate rolling 3-year, 5-year, and 10-year CAGRs—measuring CAGR for every possible 5-year period over last 20 years to assess consistency. If rolling 5-year CAGR stays 11-15% across all periods, manager demonstrates consistent skill. If it ranges 5-25%, performance is luck/market-dependent, not skill.
Yes, absolutely. Comprehensive CAGR must include ALL returns—capital appreciation PLUS dividends/interest/rental income reinvested.
Two CAGR types:
1. Price CAGR (Capital Appreciation Only):
- Stock bought at ₹500, now ₹900 after 5 years
- Price CAGR = [(900÷500)^(1÷5) - 1] × 100 = 12.47%
- Ignores dividends received during 5 years
2. Total Return CAGR (Comprehensive):
- Same stock ₹500 → ₹900, plus ₹150 total dividends reinvested
- Ending value = ₹900 + ₹150 = ₹1,050
- Total Return CAGR = [(1,050÷500)^(1÷5) - 1] × 100 = 15.98%
- Accurately reflects all wealth generated
Why it matters:
- Dividend yield impact: High-dividend stocks (4-5% yield) showing 8% price CAGR actually deliver 12-13% total return CAGR when dividends reinvested—3.5 percentage points annually compounds to massive differences over decades.
- Mutual fund comparisons: Growth option shows only NAV appreciation; Dividend Reinvestment option includes dividends in NAV. Comparing growth fund's CAGR against dividend fund's CAGR without adjustment is misleading—apples to oranges.
- Index CAGR vs Total Return: Nifty 50 Price Index shows ~11% CAGR; Nifty 50 Total Return Index (dividends included) shows ~13% CAGR. Always use Total Return indices for accurate benchmarking.
CAGR is the ONLY fair comparison method for different investment periods. Absolute returns are meaningless without time context.
Example demonstrating CAGR's power:
| Investment | Initial | Final | Period | Absolute Return | CAGR |
|---|---|---|---|---|---|
| Fund A | ₹1,00,000 | ₹1,50,000 | 2 years | 50% | 22.47% |
| Fund B | ₹1,00,000 | ₹3,00,000 | 10 years | 200% | 11.61% |
| Fund C | ₹1,00,000 | ₹2,50,000 | 5 years | 150% | 20.11% |
Absolute returns mislead: Fund B's 200% return looks best, but it took 10 years. Fund A's "modest" 50% return achieved in just 2 years translates to 22.47% CAGR—nearly double Fund B's 11.61% CAGR.
CAGR reveals truth: Fund A (22.47% CAGR) > Fund C (20.11% CAGR) > Fund B (11.61% CAGR) for performance ranking, despite absolute returns suggesting B>C>A.
Practical application: If you have 8 years to goal, investing in Fund A (22.47% CAGR) grows ₹1L to ₹5.06L. Fund B (11.61% CAGR) only reaches ₹2.43L—less than half. CAGR-based decisions optimize wealth accumulation by correctly identifying superior performers regardless of measurement period differences.
CAGR is powerful but has limitations:
1. Smooths ALL volatility (good and bad):
- Two funds with identical 12% CAGR appear equal, but one had steady 10-14% annual returns while other swung -20% to +40%
- CAGR hides risk—doesn't show maximum drawdown, volatility, or sleepless nights during crashes
- Solution: Evaluate CAGR alongside standard deviation, Sharpe ratio, and maximum drawdown
2. Assumes constant growth (never true in reality):
- CAGR suggests investment grew steadily at X% annually—actual path is always jagged
- Misleading for short-term planning—if 5-year CAGR is 15%, Year 1 might be -10%, Year 5 +35%
- Solution: Use CAGR for long-term (5+ years) projections only; shorter periods need different tools
3. Sensitive to start/end dates:
- Measuring from market peak to peak inflates CAGR; trough to trough deflates it
- Example: Nifty 50 CAGR from Jan 2007 (peak) to Dec 2008 (crisis) is -30%; Jan 2009 to Dec 2017 is +18%
- Solution: Use rolling CAGRs (calculate CAGR for every possible 5-year period) to assess consistency
4. Doesn't account for cash flows:
- CAGR works for lump sum investments only—inaccurate for SIPs or irregular contributions
- If you invested ₹10K monthly via SIP, CAGR calculation on total portfolio is complex
- Solution: Use XIRR (Extended Internal Rate of Return) for SIP/irregular cash flows, not CAGR
5. Past CAGR ≠ Future returns:
- Fund showing 18% CAGR over 10 years doesn't guarantee future 18% returns
- Market conditions, fund managers, and economic cycles change
- Solution: Use historical CAGR as reference, not promise. Plan with conservative estimates (10-11% for equity)
CAGR applies to any metric growing over time:
Business Revenue Growth:
- Company revenue: ₹50 crores (2019) → ₹125 crores (2024) = 5 years
- CAGR = [(125÷50)^(1÷5) - 1] × 100 = 20.11%
- Demonstrates explosive growth trajectory; valuable for investor pitches, M&A valuations, strategic planning
Customer/User Acquisition:
- SaaS startup: 1,000 users (Year 1) → 50,000 users (Year 4) = 3 years
- CAGR = [(50,000÷1,000)^(1÷3) - 1] × 100 = 268.4%
- Massive user growth rate critical for startup valuations and funding rounds
Market Size Growth:
- "Indian EV market growing at 45% CAGR 2020-2030" means market size compounds 45% annually
- Helps businesses forecast demand, plan capacity, allocate resources
Salary Growth:
- Salary: ₹6 lakhs (2018) → ₹12 lakhs (2024) = 6 years
- CAGR = [(12÷6)^(1÷6) - 1] × 100 = 12.25%
- Compare against inflation (6%) to assess real income growth; negotiate raises citing below-industry CAGR
Social Media Growth:
- Instagram followers: 500 (Jan 2023) → 8,000 (Jan 2024) = 1 year
- CAGR = [(8,000÷500)^(1÷1) - 1] × 100 = 1,500% (16x growth)
- While impressive, 1-year CAGR is too short—evaluate 2-3 year CAGR for sustainable growth assessment
GDP Growth:
- Countries report GDP CAGR: "India's GDP growing at 7% CAGR" means economy compounds 7% annually
- Compares economic performance across nations and time periods
CAGR and doubling time are inversely related—higher CAGR means faster doubling.
Doubling Time Formula: Years to Double = 72 ÷ CAGR (Rule of 72)
Common CAGR vs Doubling Time:
- 6% CAGR: Doubles in 12 years (typical FD/PPF rate)
- 8% CAGR: Doubles in 9 years (debt funds, balanced funds)
- 10% CAGR: Doubles in 7.2 years (conservative equity assumption)
- 12% CAGR: Doubles in 6 years (Nifty 50 historical average)
- 15% CAGR: Doubles in 4.8 years (good equity fund performance)
- 18% CAGR: Doubles in 4 years (excellent equity fund performance)
- 24% CAGR: Doubles in 3 years (exceptional, rarely sustained)
Compounding visualization: ₹1 lakh invested at different CAGRs over 20 years:
- 6% CAGR: ₹3.21 lakhs (3.2x over 20 years)
- 12% CAGR: ₹9.65 lakhs (9.6x over 20 years)
- 18% CAGR: ₹27.39 lakhs (27.4x over 20 years)
Key insight: Each additional doubling cycle adds exponentially more wealth. Getting from 2x to 4x (one more double) adds same absolute gain as getting from 1x to 2x. This is why starting early matters—more time = more doubling cycles = exponentially more wealth despite identical CAGR.
Practical use: If goal is ₹1 crore in 15 years and you have ₹25 lakhs, you need to double money twice (25L→50L→1Cr). Requiring two doubles in 15 years means each double in 7.5 years, needing ~9.6% CAGR (72÷7.5). Helps set realistic return expectations and investment allocation (debt won't work; need equity mix delivering 10%+ CAGR).