What's the difference between CAGR and absolute return?

Absolute return shows total growth regardless of how long it took. CAGR converts that growth into an equivalent constant annual rate, making it possible to compare investments held for different durations.

Can CAGR be negative?

Yes — if the ending value is lower than the starting value, CAGR will be negative, reflecting an average annual loss over the period.

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CAGR Calculator

Find the smoothed, year-over-year growth rate that took an investment from its starting value to its ending value.

Investment values

Starting value ₹1,00,000

Ending value ₹2,50,000

Time period (years) 5 yrs

Growth rate

CAGR

Absolute growth0%

Total gain₹0

CAGR smooths out year-to-year volatility into a single average annual rate — it's not the same as the actual return in any single year.

How CAGR is calculated

CAGR answers "what constant annual growth rate would have taken the starting value to the ending value over this period?" It's useful for comparing investments held for different durations on a like-for-like basis.

CAGR = [ (Ending value ÷ Starting value) ^ (1 ÷ Years) − 1 ] × 100

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Figures are estimates for planning purposes only and do not constitute financial advice.