📊 CAGR Calculator

What is CAGR?

CAGR (Compound Annual Growth Rate) is the steady yearly rate at which an investment would have grown from its start value to its end value, if it compounded every year. It smooths out the ups and downs into one comparable number — which is why it's the standard way to compare mutual funds, stocks and businesses.

CAGR = (Final ÷ Initial)^{(1 ÷ years)} − 1

Unlike a simple average return, CAGR accounts for compounding. A ₹1,00,000 investment that becomes ₹2,50,000 in 5 years has a 150% absolute return, but a CAGR of about 20% per year.

Frequently Asked Questions

What is a good CAGR for an investment?

For Indian equity over the long term, 12–15% CAGR is considered healthy. Anything consistently above inflation (about 6%) grows your real wealth.

How is CAGR different from absolute return?

Absolute return is the total gain over the whole period. CAGR converts that into a per-year compounded rate, so investments over different time spans can be compared fairly.

Can CAGR be negative?

Yes — if the final value is less than the initial value, the CAGR is negative, meaning the investment shrank each year on average.

Does CAGR show risk or volatility?

No. CAGR only shows the smoothed growth rate. Two investments can have the same CAGR but very different year-to-year swings (risk).

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