CAGR (Compound Annual Growth Rate) is the smoothed annualised rate at which an investment grows from its initial value to its final value over a given number of years, assuming profits are reinvested.

How is CAGR calculated?

CAGR = (Ending Value / Beginning Value) ^ (1 / number of years) - 1, expressed as a percentage. It ignores interim volatility and reflects a single constant annual growth rate.

How is CAGR different from absolute return?

Absolute return is the total percentage gain over the whole period, while CAGR annualises that gain so you can compare investments held for different durations on an equal yearly basis.

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Investment Tools

CAGR Calculator

Calculate the Compound Annual Growth Rate (CAGR) of your investments over time. Essential for comparing stock returns, mutual fund performances, and portfolio yields.

Growth Parameters

Initial Value (₹)

Final Value (₹)

Duration (Years)5 Yr

1 Yr30 Yrs

Investment Returns

CAGR (Annualized Return)20.11%

Absolute Return150.00%

Returns Multiplier2.50x

Annual Growth Trajectory

Year 1₹12,011

Year 2₹14,427

Year 3₹17,329

Year 4₹20,814

Year 5₹25,000

What does CAGR represent?

The Compound Annual Growth Rate (CAGR) is the annualized rate of compounding return that would grow an investment from its starting balance to its ending balance, assuming the investment grew at a steady, constant rate over the period.

CAGR is highly effective because it smooths out the year-on-year volatility of assets, allowing direct mathematical comparison between completely different assets like real estate, gold, mutual funds, or individual stocks.