https://v2.webnotes.in/tags/cagr-vs-xirr/Recent content in CAGR vs XIRR on WebNotesHugoen-INMon, 18 May 2026 00:00:00 +0000https://v2.webnotes.in/cagr-vs-xirr/Mon, 18 May 2026 00:00:00 +0000https://v2.webnotes.in/cagr-vs-xirr/<p><strong>CAGR (Compound Annual Growth Rate) and XIRR (Extended Internal Rate of Return)</strong> are two methods to compute mutual fund returns. They differ in application:</p> <ul> <li><strong>CAGR</strong>: For single-investment-single-withdrawal scenarios.</li> <li><strong>XIRR</strong>: For multi-cash-flow scenarios like SIPs, SWPs.</li> </ul> <h2 id="cagr">CAGR</h2> <h3 id="formula">Formula</h3> <p>CAGR = (Final value / Initial value)^(1/Number of years) - 1</p> <h3 id="when-to-use">When to use</h3> <ul> <li><strong>Lump-sum investment, lump-sum redemption</strong>: One investment, one redemption.</li> <li><strong>Direct stock investment</strong>: Single buy, single sell.</li> </ul> <h3 id="example">Example</h3> <p>Rs 10 lakh invested in 2019, sold for Rs 18 lakh in 2024 (5 years):</p>