CAGR Calculator
CAGR tells you the steady yearly growth that takes an investment from its starting value to its final value. It is the fairest way to compare investments held for different periods.
How to use it
- Enter the value you started with and the value now.
- Enter how many years you held the investment.
- Compare the CAGR with an FD and with inflation.
How it is calculated
CAGR = (ending value / starting value)^(1 / years) - 1.
Frequently asked questions
What is a good CAGR?
Anything comfortably above inflation (about 4-6%) grows your real wealth. Equity has historically delivered 11-13% over long periods in India, with large swings.
How is CAGR different from absolute return?
Absolute return is the total gain over the whole period. CAGR spreads that gain into an equal yearly rate, so a 150% gain over 5 years is a 20.1% CAGR.
Can I use CAGR for SIPs?
Not accurately, because SIP money goes in at different times. Use XIRR for SIPs.
Does CAGR show risk?
No. It smooths out the ups and downs in between.