CAGR Calculator
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CAGR (Annualised)
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Absolute Return
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CAGR smooths returns into a single annual rate — it does not reflect year-to-year volatility.
CAGR — Compound Annual Growth Rate — is the single annual rate at which an investment would have needed to grow, every year, to go from its starting value to its ending value over a given period.
It's the standard way to compare investments of different durations on equal footing, and it's what most mutual fund fact sheets quote as "annualised return."
How This Calculator Works
CAGR = ((End Value / Start Value)1/n − 1) × 100, where n is the number of years between the start and end values.
Frequently Asked Questions
Is CAGR the same as average annual return?
No, and this is a common mix-up. A simple average of yearly returns can be misleading because it ignores compounding and the order of gains and losses. CAGR gives the smoothed, compounded equivalent rate.
Can CAGR be negative?
Yes — if your ending value is lower than your starting value, CAGR will be negative, reflecting an average annual loss.
Does CAGR show volatility?
No. Two investments can have identical CAGR while one had a smooth ride and the other had wild swings along the way. CAGR only describes the start and end points.