CAGR & Absolute Returns Calculator
Compute Compound Annual Growth Rate (CAGR) and total absolute gains for stocks, mutual funds, or real estate assets.
Yearly Compounding Curve
Frequently Asked Questions
What is the difference between CAGR and Absolute Returns?
Absolute Returns represent the simple growth margin (e.g. 50% profit overall) irrespective of how many years it took. CAGR (Compound Annual Growth Rate) measures the smoothed annual growth rate required to hit that final valuation, incorporating compounding periods.
Why is CAGR better than absolute returns for long horizons?
CAGR allows you to make apple-to-apple comparisons between different investments held over varying time frames (e.g. comparing a stock held for 3 years vs an FD held for 5 years) by converting their returns to a standardized annualized growth parameter.
Related Articles
Related Tools
CAGR: The One Number That Reveals Whether Your Investment Is Actually Working
Your mutual fund's fact sheet says "returns since inception: 287%." Your friend's portfolio is up "₹4.3 lakhs." Your stock WhatsApp group is showing "10x in 3 years." None of these numbers are directly comparable — unless you convert them all into CAGR (Compound Annual Growth Rate).
CAGR is the single metric that normalises all investments to an apples-to-apples annual return rate. It answers: "If this investment grew at a constant rate each year, what rate would produce the same result?" A 287% total return over 12 years is a 12.4% CAGR — solid, but not spectacular. A "10x in 3 years" is a 115% CAGR — which almost certainly involves either exceptional luck or exceptional risk.
The formula: CAGR = (Ending Value / Beginning Value)^(1/n) – 1, where n is the number of years. Our calculator handles this instantly, and also calculates the absolute gain and total return percentage.
When evaluating mutual funds, compare CAGR over 5-year and 10-year periods against the benchmark index CAGR. A fund that consistently beats its benchmark by 2–3% CAGR over 10 years is genuinely skilled. One that beats it by 0.5% is barely earning its expense ratio.
Related Planners
Continue exploring tools in the Investing & Growth category.
SCSS Calculator
Model quarterly interest payouts and maturity returns for the Senior Citizens Savings Scheme.
NSC Calculator
Calculate guaranteed maturity returns for the 5-year National Savings Certificate post office scheme.
Loan Comparison
Compare two loan offers side-by-side on EMI payouts, interest components, and overall costs.