Measure the true performance of your investments with our Compound Annual Growth Rate calculator.
CAGR stands for Compound Annual Growth Rate. It is the measure of an investment's annual growth rate over time, assuming that any profits were reinvested at the end of each year. It is one of the most accurate ways to determine returns for anything that can rise or fall in value over time.
Absolute Return simply measures the total percentage gained or lost. CAGR accounts for the time value of money, providing a smoothed-out annualized rate.
The Compound Annual Growth Rate (CAGR) calculator is the gold standard for measuring historical performance. It ignores the wild ups and downs of the market over the years and calculates a single, smooth annual percentage rate. Simply plug in your starting value, ending value, and time period to find out exactly how hard your money worked for you.
The percentage result you see is the theoretical steady rate at which your investment would have grown if it had compounded at the exact same rate every single year. It is crucial for comparing different investments—like comparing a piece of real estate you held for 8 years against a mutual fund portfolio. A higher CAGR indicates superior historical performance.
Initial Value is what you paid to acquire the asset. Final Value is what the asset is worth today or what you sold it for. Annualized Return is a standardized way to compare returns over periods longer than one year, making it easy to benchmark against fixed deposits or inflation.
Absolute return doesn't account for time. Making a 50% profit in 1 year is amazing, but making a 50% profit over 10 years is terrible. CAGR standardizes this by factoring in the time period.
Yes, if your final value is lower than your initial investment, the CAGR will be a negative percentage, indicating an annualized loss.
No, CAGR entirely ignores what happened between the start and end dates. It assumes a smooth, straight-line growth, which can sometimes mask high volatility.
No, CAGR is strictly for point-to-point, single-sum investments. For SIPs, you should use XIRR (Extended Internal Rate of Return).
Historically, diversified Indian equity mutual funds (like Nifty 50 index funds) have delivered a long-term CAGR of around 12% to 14%.
Simple interest only calculates returns on the principal. CAGR assumes that any profits earned each year are reinvested to generate more profits the following year.
Absolutely. If you bought a house for ₹50 Lakhs and sold it 10 years later for ₹1.2 Crores, this calculator will give you the exact annualized return of your property.
No, unless you manually deduct those expenses from your 'Final Value' before calculating, the raw CAGR does not account for taxation or brokerage fees.