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Calculate the compound annual growth rate of your investments. Understand your investment performance with CAGR, total return, and absolute return.
CAGR
14.87%Total Return
₹1,00,00050.0% of total
Absolute Return
100.00%CAGR (Compound Annual Growth Rate) is the most common metric used to measure investment performance over time. It assumes the investment grows at a steady rate each year, making it easy to compare different investments regardless of time period.
If you invested ₹1,00,000 and it grew to ₹2,00,000 in 3 years, your CAGR would be (2,00,000 / 1,00,000)^(1/3) - 1 = 0.2599 or 25.99%. The absolute return is 100%, but the annualized return is 25.99%.
CAGR is more useful than absolute return for comparing investments across different time periods. An investment that doubles in 3 years (25.99% CAGR) is far better than one that doubles in 7 years (10.41% CAGR), even though both have 100% absolute returns. Always use CAGR when evaluating or comparing investment performance.
CAGR (Compound Annual Growth Rate) measures the mean annual growth rate of an investment over a specified time period, assuming profits are reinvested.
CAGR is calculated using the formula: CAGR = (End Value / Start Value)^(1/Years) - 1. It gives the annualized return rate.
Absolute return shows the total percentage gain over the entire period, while CAGR shows the annualized return. For example, a 100% gain over 5 years equals about 14.87% CAGR. CAGR is more useful for comparing investments of different time periods.
Yes, CAGR can be negative if the end value of your investment is less than the start value. A negative CAGR indicates a loss over the investment period. For example, if ₹1,00,000 becomes ₹80,000 in 3 years, the CAGR is approximately -7.17%.