CAGR Calculator
Find the compound annual growth rate between a starting and ending value over a number of years.
CAGR
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- Absolute return
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- Growth multiple
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Formula
CAGR = (Ending value ÷ Beginning value)^(1 ÷ years) − 1
CAGR smooths out the path of returns into a single annual rate. It does not show volatility — two investments with the same CAGR can have very different ups and downs.
Worked example
An investment grows from ₹1,00,000 to ₹2,00,000 in 5 years. The absolute return is 100%, but the CAGR is about 14.87% a year: ₹1,00,000 compounded at 14.87% for five years gives ₹2,00,000.
When to use CAGR
- Comparing a single investment's performance over different periods, or against an index.
- Comparing two investments held for different lengths of time — absolute return alone would favour the one held longer.
- Checking whether a fund or stock has kept pace with inflation over a period.
When not to use CAGR
CAGR needs one starting value, one ending value and no money added or withdrawn in between. If you invested in instalments (for example through a SIP) or took money out, CAGR will mislead you; use XIRR instead. For holding periods shorter than a year, the annualised figure can look extreme and is best ignored.
Inputs
Values must be greater than zero and the duration must be positive; otherwise the calculator shows a dash instead of a result. For fractional periods, enter decimals — 2 years and 6 months is 2.5.
Frequently asked questions
Is CAGR the same as XIRR?
No. CAGR uses one start and one end value. XIRR handles multiple cash flows at different dates, such as SIPs.