CAGR
Compound Annual Growth Rate — the constant annual rate at which an investment would have grown from start value to end value.
Definition
CAGR is the smoothed annual rate of return — what rate would have produced your actual end value from your start value, compounded annually over the period. It eliminates the noise of year-to-year volatility and gives one comparable number across investments and time periods.
CAGR is for single-investment / single-redemption cases. For irregular cash flows (SIPs, additional contributions, partial withdrawals), use XIRR instead — which handles the timing differences.
Formula
CAGR = (Final / Initial)^(1/years) − 1Example
₹1 lakh invested in 2010 grew to ₹3 lakh by 2025 (15 years). CAGR = (3/1)^(1/15) − 1 ≈ 7.6%.
Calculators that use this
CAGR
Calculate the Compound Annual Growth Rate — the smoothed yearly rate that an investment grew at, given its starting and ending values over a known period.
Open calculatorXIRR
Calculate XIRR — annualised return on irregular investments and withdrawals. The standard metric for evaluating SIP returns and other timed cash flows.
Open calculatorSIP
Calculate the future value of your monthly Systematic Investment Plan (SIP) in mutual funds. See total invested, gains, and final corpus.
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