CAGR Calculator
Measure the return you actually earned. Convert a start value, an end value and a time period into a smoothed annual growth rate.
About the CAGR Calculator
Compound Annual Growth Rate (CAGR) answers a specific question: what constant annual return would have taken your starting amount to your ending amount over this period? It smooths away the year-to-year volatility, which makes it the standard way to compare investments held for different lengths of time.
CAGR formula
CAGR = [(Final value / Initial value)^(1 / n) - 1] x 100
- n
- Number of years between the two values
CAGR describes a hypothetical smooth path. It tells you nothing about the volatility experienced along the way.
Using this calculator
- Enter what the investment was worth at the start.
- Enter what it is worth now.
- Set the number of years between the two.
- Read the annualised rate, and compare it with the absolute return.
CAGR Calculator FAQs
What is a good CAGR?
It depends entirely on the asset and the period. For Indian equity over long horizons, a CAGR around 10-12% is broadly in line with history. For a fixed deposit, 6-7% is normal. Always compare against a relevant benchmark.
What is the difference between CAGR and absolute return?
Absolute return is total growth ignoring time - doubling your money is 100% whether it took two years or twenty. CAGR divides that growth across the years, producing a rate you can compare between investments of different lengths.
When should I use XIRR instead of CAGR?
Use CAGR when there is one inflow and one outflow. Use XIRR when money went in or out at multiple points, such as a SIP or a portfolio with additions and withdrawals, because CAGR cannot handle irregular cash flows.
Can CAGR be negative?
Yes. If the final value is lower than the initial value, the CAGR is negative, which represents the constant annual rate of decline over the period. The calculator handles this correctly.
Does CAGR account for inflation?
No, it produces a nominal rate. To get the real return, subtract the inflation rate over the same period. A 10% CAGR during 6% inflation represents roughly 4% of genuine purchasing-power growth.
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Important: this calculator provides general information and arithmetic only. It is not personal financial, tax or investment advice. Projected returns are illustrations based on the rate you enter, not guarantees, and market-linked investments can fall in value. Verify current tax rates and scheme terms before acting, and consult a qualified adviser where the decision matters.