Compound annual growth rate between two values.
Determine the Compound Annual Growth Rate of investments. Compare annualized returns between initial and final valuations.
Where: EV is ending investment valuation; BV is beginning valuation; and n is duration in years.
Absolute return ignores time horizon length. CAGR converts multi-year gains into a single annualized rate, allowing clear comparison across different asset classes.
Investments fluctuate unpredictably. CAGR computes geometric mean growth as if capital grew at a constant smooth annual rate throughout the tenure.
Comparing mutual fund or stock performance against benchmark index CAGRs over 3, 5, and 10 years highlights true risk-adjusted alpha generation.
A CAGR of 12% to 15% over a 7+ year horizon is generally considered strong for equity mutual funds in developing economies like India.
Yes, if final value is lower than initial value, CAGR returns a negative annual percentage indicating loss rate.
CAGR works best for lumpsum single investments. XIRR (Extended Internal Rate of Return) is used for multiple cash flows like SIPs.
Future value of a monthly investment plan.
Growth of a one-time investment over time.
Calculate the potential savings loss of delaying your Systematic Investment Plan.
Calculate the corpus growth when you increase SIP contributions yearly.