Why use CAGR instead of absolute return?

Absolute return only tells you the total growth (e.g., 50%), but doesn't tell you how long it took. CAGR tells you the average yearly growth (e.g., 10% per year for 5 years), which makes it easier to compare against other investments like FDs or Mutual Funds.

Can CAGR be negative?

Yes, if the ending value is less than the beginning value, the CAGR will be negative, indicating a loss.

Does CAGR account for volatility?

No, CAGR implies a steady growth rate. In reality, investments fluctuate. It smooths out the 'noise' to show the trend.

CAGR Calculator

Calculate Compound Annual Growth Rate for your investments

Investment Details

Initial Investment

Final Value

Duration (Years)

CAGR (Annualized)

20.11%

Total Absolute Growth

150%

Growth Projection

CAGR is useful for comparing the returns of different investments over time, as it smoothes out volatility.

What is CAGR?

CAGR (Compound Annual Growth Rate) is the mean annual growth rate of an investment over a specified time period longer than one year. It represents one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time.

How it Works