CAGR CalculatorAnnualised return
Turn a starting value, ending value and holding period into one comparable annual growth rate. The result also shows total return, absolute gain and the smooth path implied by that CAGR.
Highlights
- Calculates CAGR for investments, revenue or any positive value.
- Shows annualised return separately from total return.
- Supports fractional holding periods.
- Plots the smoothed growth path implied by the result.
Formula used
CAGR = (Ending ÷ Beginning)^(1 ÷ Years) − 1
CAGR smooths the journey into one annualised rate; it does not show volatility.
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Compound annual growth rate
20.11%
Annualised growth rate
Absolute gain
₹1.50 L
Total return
150.00%
Growth multiple
2.50×
Period
5 years
Annualised growth path
The smooth path implied by the CAGR between your starting and ending values.
What CAGR tells you
CAGR answers: what constant annual return would turn the beginning value into the ending value over this period? It is useful for comparing growth across investments or businesses with different starting sizes and time spans.
It is a smoothing measure. An investment can rise 40% one year and fall sharply the next while reporting the same CAGR as a steady investment, so CAGR should be read alongside volatility and drawdowns.
CAGR versus absolute return
Absolute return ignores time. A 50% gain over two years and a 50% gain over ten years have the same absolute return but very different CAGRs. Annualising makes the speed of growth comparable.
Methodology
- CAGR equals (ending value ÷ beginning value) raised to 1 ÷ years, minus one.
- Total return measures the full-period gain relative to the beginning value.
- The chart interpolates a constant compounded annual rate; it does not reconstruct actual yearly returns.
Scope and assumptions
- Beginning value, ending value and duration must be greater than zero.
- No cash flows occur between the beginning and ending dates.
- Use XIRR rather than CAGR when there are irregular deposits or withdrawals.
FAQ
What is CAGR?
CAGR stands for compound annual growth rate. It is the constant annual rate that would connect a beginning value to an ending value over a specified number of years.
How is CAGR calculated?
Divide ending value by beginning value, raise the result to the power of one divided by the number of years, then subtract one and express it as a percentage.
Is CAGR the same as annual return?
CAGR is an annualised return across the full period. It is not necessarily the return earned in any individual year and it hides volatility between the two endpoints.
Can CAGR be negative?
Yes. If the ending value is lower than the beginning value, CAGR is negative and represents the smoothed annual rate of decline.
When should I use XIRR instead of CAGR?
Use XIRR when money was added or withdrawn on different dates, such as SIPs or irregular investments. CAGR assumes only a beginning value and an ending value with no intermediate cash flows.