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CAGR (Compound Annual Growth Rate) is the single, steady annual rate of return that would take an investment from its starting value to its ending value over a given period, assuming the growth compounded evenly every year. It is the standard way to compare investments — mutual funds, stocks, or a whole portfolio — on a like-for-like annual basis, even when the underlying journey was volatile.
Absolute return just tells you the total percentage gain from start to end — it does not account for how long that gain took. CAGR annualises it, so a 100% absolute gain over 10 years (roughly 7.2% CAGR) looks very different from the same 100% gain over 2 years (roughly 41% CAGR). Always compare CAGR, not absolute return, when judging investments held for different durations.
CAGR assumes a single lump sum invested at the start and a single value at the end — it cannot handle multiple cash flows on different dates. If you have made several investments or withdrawals at different times (like a SIP, top-ups, or partial redemptions), use the XIRR Calculator instead, which is built for exactly that.
An investment of ₹1,00,000 growing to ₹2,00,000 over 5 years:
CAGR = (2,00,000 ÷ 1,00,000)1/5 − 1 ≈ 14.87% per year. Your money effectively doubled — but it did so at a steady annual pace of roughly 14.87%, not all at once.
Enter your initial investment, its final value today (or at any point), and the number of years between the two. The calculator instantly shows the annualised growth rate, your total gain, and how many times your money multiplied.
Generally yes, but always check it against the risk taken and the time period involved. A very high CAGR over a short period, or from a volatile asset, may not be repeatable — compare CAGR alongside consistency and risk, not in isolation.
Diversified Indian equity funds have historically delivered roughly 10–14% CAGR over long periods (10+ years), though this varies by market cycle and fund category. Past CAGR is never a guarantee of future returns.
Yes — if the final value is lower than the initial investment, CAGR will be negative, showing the annualised rate of decline over the period.
