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CAGR Calculator
The compound annual growth rate between any two values, and what it hides.
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Result
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CAGR is the steady annual rate that would have taken a starting value to an ending value over a period. It is the standard way to compare investments of different lengths.
What it smooths away
Two investments with the same CAGR can have felt completely different. One may have climbed steadily; the other may have halved and recovered. CAGR says nothing about the path, which is exactly what you experience while holding it.
When CAGR is the wrong tool
If you added money over time — a SIP, or top-ups — CAGR cannot account for the dates of each contribution. XIRR is the correct measure there, and the two can differ substantially.
Sanity checking a claim
Any long-run CAGR well above 15% deserves scepticism, as does any figure quoted without the period it covers. A three-year number measured from a market bottom tells you about the starting point, not the investment.
Frequently asked questions
What is the difference between CAGR and absolute return?
Absolute return is total growth regardless of time. CAGR converts that into an annual rate, which is what makes two investments of different lengths comparable. A 100% absolute return over two years is a far better outcome than the same return over ten.
When should I use XIRR instead?
Whenever money went in on more than one date — a SIP, or top-ups. CAGR assumes a single investment at the start, so it cannot account for the timing of later contributions, and the two figures can differ substantially.
Is a high CAGR always good?
Not on its own. A three-year CAGR measured from a market bottom tells you about the starting point. Any long-run figure well above 15%, or one quoted without the period it covers, deserves scepticism.
Can CAGR be negative?
Yes, when the ending value is below the starting value. The calculator will show it as a negative rate, which is the correct way to express a compounded loss.