About the CAGR Calculator
CAGR is the steady yearly growth rate that takes an investment from its starting value to its ending value. An investment that grew from ₹1,00,000 to ₹2,50,000 in 7 years has a CAGR of 13.99% a year.
How it is calculated
CAGR = (Ending value ÷ Starting value)^(1 ÷ years) − 1
- CAGR smooths out ups and downs into one yearly rate.
- It assumes no money was added or taken out in between. For regular SIPs, use XIRR instead.
Worked example
Inputs: ₹1,00,000 growing to ₹2,50,000 in 7 years.
Result: CAGR 13.99% a year.
Frequently asked questions
What is CAGR?
Compound annual growth rate: the constant yearly rate at which a value would have grown from start to end.
What is the difference between CAGR and absolute return?
Absolute return is the total percentage gain, regardless of time. CAGR spreads it across the years, so investments held for different periods can be compared.
Can I use CAGR for SIP returns?
No. CAGR assumes a single investment. For multiple investments at different dates, use XIRR.