What is CAGR?
CAGR stands for Compounded Annual Growth Rate. It is the rate at which your investment would have grown every
year to reach the final value from the initial value over a specific period, assuming profits are reinvested
each year.
CAGR gives a smoothed annual return percentage, ignoring short-term ups and downs, which makes it a reliable
way to compare investments held over different time periods.
Why Use Our CAGR Calculator?
- Measure the true long-term growth of your investments
- Compare different investment options on a like-for-like basis
- Evaluate mutual fund or stock portfolio performance over years
- Remove short-term volatility and focus on real compounded returns
- Understand the implied year-by-year growth path
CAGR Calculation Formula
How to Use This CAGR Calculator
- Select your preferred currency
- Drag the initial investment slider
- Set the final value your investment reached
- Set the holding period in years
- Your CAGR and absolute gain update instantly
Frequently Asked Questions
What is CAGR?
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CAGR stands for Compounded Annual Growth Rate. It is the constant annual rate at which an investment would have grown from its initial value to its final value over a given period, assuming profits are reinvested each year.
What formula is used to calculate CAGR?
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CAGR = [(Final Value / Initial Value) raised to the power (1 / Years)] minus 1, with the result multiplied by 100 to express it as a percentage.
How is CAGR different from absolute returns?
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Absolute returns show the total percentage gain over the entire holding period, while CAGR smooths that gain into an equivalent constant annual growth rate, making it easier to compare investments held for different lengths of time.
Plan More with PaisaKawach
Besides the CAGR calculator, PaisaKawach provides a suite of tools including FD, RD, EMI, and SIP calculators
to help you make informed financial choices.
