CAGR Calculator
CAGR smooths an investment's actual (bumpy) year-to-year path into a single, comparable annual growth rate, as if it had grown at exactly that steady rate every year.
CAGR = ((End value / Start value)(1/years) - 1) × 100.
How to use this calculator
Enter the value you started with, the value you ended with, and the number of years between them. The calculator works backward to find the single, constant annual rate that reconciles the two.
What this doesn't account for
CAGR smooths out every year in between into one number; it says nothing about how bumpy the path was, and a fund that fell sharply then recovered can show the same CAGR as one that grew steadily the whole time.
Frequently asked questions
What does CAGR stand for?
Compound Annual Growth Rate: the constant annual rate an investment would need to grow at, uniformly, to go from its starting value to its ending value over the stated period.
How is CAGR different from average annual return?
A simple average of yearly returns can overstate real growth because it ignores compounding and the order of gains and losses. CAGR is the single smoothed rate that actually reconciles the start and end values.
Does CAGR account for volatility along the way?
No. Two investments with the same start value, end value and duration have the same CAGR even if one had wild swings and the other grew steadily.
Can CAGR be negative?
Yes, if the ending value is lower than the starting value, CAGR is negative, representing an average annual decline.
Is CAGR the same as XIRR?
No. CAGR assumes a single lumpsum invested once. XIRR (extended internal rate of return) handles multiple cash flows at different dates, such as SIP instalments, which CAGR cannot.
What counts as a good CAGR?
This calculator doesn't judge that; it depends entirely on the asset class, risk taken and time period being compared. Compare like for like, such as only against similar funds over the same period.
Does CAGR include dividends or only price appreciation?
That depends entirely on what ending value you enter. Including reinvested dividends in your ending value reflects total return; excluding them reflects only price return.
Can I use CAGR to compare two investments with different durations?
Yes, that's exactly what CAGR is designed for, since it's already annualised, unlike a simple total-return percentage which isn't directly comparable across different time periods.
This is a generic financial calculation, not investment, loan or tax advice specific to you. BrokerLens is not a SEBI-registered investment adviser.