CAGR Calculator
Calculate the Compound Annual Growth Rate of your investments.
Your Investment Details
What is CAGR?
CAGR (Compound Annual Growth Rate) is the average annual growth rate of an investment over a specific period. It smooths out the returns and gives a single number that represents how much your investment grew each year.
Formula
CAGR = [(Final Value / Initial Value)^(1/n) − 1] × 100
- n = Number of years
Why CAGR is Useful
- Compare different investments over the same period
- Measure mutual fund and stock performance
- Track business revenue growth
- Plan long-term financial goals
CAGR vs Absolute Return
- Absolute Return: Total return (e.g., 100% in 5 years)
- CAGR: Average annual return (e.g., 14.87% per year)
- CAGR gives a better picture of performance over time
Important Note
CAGR assumes steady growth, but in reality, investments fluctuate. It is a useful metric for comparison, but it does not show the volatility of returns.