Enter your initial investment value, final investment value, and number of years to calculate the Compound Annual Growth Rate (CAGR). Your CAGR Calculator returns the annualised growth rate as a percentage, plus the absolute gain — giving you a clear picture of how your investment has grown over time.
CAGR
--
Absolute Gain
--
Absolute Return
--
Final Value
--
CAGR stands for Compound Annual Growth Rate. It represents the steady annual rate at which an investment would have grown from its starting value to its ending value, assuming all returns were reinvested each year. It smooths out volatile year-to-year fluctuations to give a single, comparable growth figure.
The CAGR formula is: CAGR = (Final Value / Initial Value)^(1/n) – 1, where n is the number of years. Multiply the result by 100 to express it as a percentage. For example, an investment growing from $10,000 to $25,000 over 5 years gives a CAGR of approximately 20.11%.
You enter three inputs — the initial investment value, the final investment value, and the duration in years. The calculator applies the CAGR formula to find the annualised growth rate that connects those two values over that time period. It does not account for any interim deposits or withdrawals.
A 'good' CAGR depends on the asset class and time horizon. For equities, a CAGR above 10–15% per year is generally considered strong. For savings accounts or bonds, 4–7% may be typical. Always compare CAGR against a relevant benchmark for the asset you are evaluating.
Yes. If you have monthly data, convert the number of periods to a fractional year (e.g. 18 months = 1.5 years) and enter it in the years field. The same CAGR formula applies, and the result will still be expressed as an annualised rate.
CAGR assumes a single lump-sum investment with no intermediate cash flows and calculates the annualised return between two points. XIRR is more flexible and handles multiple, irregular cash flows (like SIP investments) by finding the internal rate of return across all transactions. For SIPs, XIRR is the more accurate measure.
CAGR ignores volatility — two investments with the same CAGR can have very different risk profiles. It also assumes constant growth and does not reflect any cash added or withdrawn during the period. For investments with multiple cash flows, metrics like XIRR or IRR are more appropriate.
CAGR is widely used to compare mutual fund performance, evaluate stock returns, assess business revenue growth, and benchmark portfolio performance against market indices. It provides a standardised, apples-to-apples comparison across different investments and time horizons.