📈 CAGR Calculator
CAGR = (Final / Initial)^(1/years) − 1 — find the annual growth rate of your investment.
Frequently Asked Questions
How do I use the CAGR Calculator?
Enter the Initial Value, Final Value, and Time Period (in years) of your investment — use the preset buttons for quick entry or type your own values. Click "Calculate CAGR" to see your annualised growth rate, absolute return, total growth, and a year-by-year value breakdown with charts.
What is the formula for CAGR?
CAGR = (Final Value / Initial Value)(1/Years) − 1, expressed as a percentage. It represents the constant annual rate at which an investment would have grown if it grew steadily, rather than fluctuating, from its initial value to its final value over the given period.
What is the difference between CAGR and absolute return?
Absolute return is the total percentage change in value over the entire period, regardless of how long it took. CAGR annualises that growth, making it possible to fairly compare investments held for different lengths of time.
Does CAGR reflect actual year-to-year returns?
No. CAGR is a smoothed, hypothetical rate — it shows what a steady annual growth rate would look like, not the actual ups and downs an investment experienced. Two investments with the same CAGR can have very different risk profiles depending on their year-to-year volatility.
Can I use CAGR to compare mutual funds or stocks?
Yes, CAGR is commonly used to compare the historical performance of mutual funds, stocks, or other investments over the same time period. However, past CAGR does not guarantee future returns — for projecting future growth of regular investments, see our SIP Calculator or Lumpsum Calculator.
Can CAGR be negative, and what does that mean?
Yes. If your Final Value is lower than your Initial Value, the formula (Final/Initial)^(1/Years) − 1 produces a negative result, indicating the investment lost value annually on average over the period. A negative CAGR is a useful way to express an overall loss as an annualised percentage, just like a positive CAGR expresses a gain.
Why shouldn't I use CAGR if I added or withdrew money during the period?
CAGR assumes only two cash flows — an initial investment and a final value — with nothing in between. If you made additional contributions, partial withdrawals, or multiple SIP instalments during the period, CAGR will give a misleading growth rate. In that case, use our XIRR Calculator, which correctly accounts for cash flows on different dates.