CAGR Calculator
CAGR turns growth over several years into a single yearly rate, so you can compare investments held for different lengths of time.
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What this calculator shows
If an investment went from one value to another over a number of years, CAGR answers: what constant yearly growth rate would have produced the same result? The calculator also shows the absolute return — the total percentage change — so you can see the difference between the two measures.
The formula, in plain words
CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1. Absolute return = (ending value − starting value) ÷ starting value. A negative CAGR means the value shrank on average each year.
A worked example
An investment that grew from ₹1,00,000 to ₹2,00,000 in six years has an absolute return of 100% and a CAGR of about 12.25%. If the same doubling took ten years, the CAGR would be only about 7.18%. The absolute return is identical; time makes all the difference.
Assumptions and limits
- It assumes no money was added or withdrawn between the start and end.
- It smooths over volatility, so it says nothing about risk.
- Past CAGR is a description of what happened, not a forecast.
Frequently asked questions
Why not just divide total return by the number of years?
Because returns compound. Doubling in six years is a 100% total gain, but the steady yearly rate that produces it is about 12.2%, not 16.7%.
Can I use CAGR for a SIP?
Not directly. CAGR assumes one starting amount. For a series of investments made at different times, XIRR is the right measure.
Does CAGR show how bumpy the ride was?
No. Two investments with the same CAGR can have very different ups and downs along the way. CAGR describes only the start and end points.
These figures are estimates for learning and planning, not investment, tax, or legal advice. Returns on market-linked investments are not guaranteed, and real outcomes depend on fees, taxes, timing, and actual returns. See our disclaimer.