CAGR Calculator: Your Investment’s True Annual Growth

Returns over several years can mislead. CAGR shows the smooth annual rate your investment actually grew at.

What is it?

CAGR (Compound Annual Growth Rate) is the constant yearly rate that takes your starting value to the ending value over the period.

How is it calculated?

CAGR = (Ending ÷ Beginning)^(1 ÷ years) − 1, expressed as a percentage.

Example

₹1 lakh growing to ₹2.5 lakh in 7 years is a CAGR of about 13.96% a year.

Key things to know

• CAGR smooths volatility — actual year-to-year returns differ.
• Use it to compare investments over equal periods.
• It ignores interim cash flows; use XIRR for those.
• Pair it with risk before judging an investment.

What to do next

Track your portfolio’s CAGR to compare options fairly.

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Frequently asked questions

CAGR vs absolute return?
Absolute return ignores time; CAGR annualises it.

Is higher CAGR always better?
Not without considering risk and consistency.

When should I use XIRR instead?
When there are multiple cash flows at different times.

Disclaimer: This article is for general information only and is not financial or tax advice. Consult a qualified advisor before making investment or tax decisions.