Calculate the smoothed annual growth rate between a beginning and ending value. CAGR is useful for comparing one-time investments or business values held over different periods, but it does not reveal the volatility experienced between those dates.
What this CAGR calculator shows
- CAGR: the annual rate that would compound the beginning value into the ending value.
- Absolute return: the total percentage change over the full period.
- Value change: the rupee increase or decrease between the two values.
How CAGR is calculated
The calculator uses `CAGR = ((Ending value / Beginning value)^(1 / years) – 1) x 100`. For example, Rs. 15,000 growing to Rs. 25,000 in three years produces a CAGR of about 18.56% and an absolute return of 66.67%.
CAGR assumes smooth growth and reinvestment. It does not show interim gains, losses, volatility, fees, tax, or risk. It is unsuitable when money was added or withdrawn during the period; XIRR is generally used for irregular cash flows.
Common questions
Is CAGR the same as total return?
No. Total or absolute return measures the full percentage change. CAGR converts that change into a smoothed annual rate that accounts for time.
Can CAGR be negative?
Yes. CAGR is negative when a positive beginning value falls to a lower positive ending value.
Can I calculate SIP performance with CAGR?
CAGR is not appropriate for a SIP because contributions occur on multiple dates. Use an XIRR calculation based on every cash-flow date for actual SIP performance.
Does CAGR show investment risk?
No. Two investments can have the same CAGR while experiencing very different volatility and losses along the way.
More calculators
Use the lumpsum calculator to project a one-time investment, the SIP calculator for monthly contributions, or the compound interest calculator to compare compounding frequencies.
