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CAGR Calculator
Compound annual growth rate between any two values, with absolute return and doubling time.
InvestingInputs
Results
Formula
- CAGR = [(Final / Initial)^(1/t) − 1] × 100
- Absolute return = (Final − Initial) / Initial × 100
- Doubling time = ln 2 / ln(1 + CAGR)
CAGR is the constant annual rate that would take the initial value to the final value over the period — a smoothed geometric mean that removes the noise of year-to-year swings. It is the only fair way to compare investments of different durations, and it is always lower than the arithmetic average of annual returns whenever returns are volatile.
Step-by-step Calculation
- 1.Growth ratio
250,000 / 100,0002.5000 - 2.Annualised
ratio^(1/5) − 120.11% - 3.Absolute return
(250,000 − 100,000) / 100,000150.0%
Assumptions
- • No intermediate cashflows — use XIRR if money was added or withdrawn
- • Values are net of costs
Money Tips
- ◆For SIPs and irregular cashflows, CAGR is wrong — use XIRR.
- ◆Compare CAGR against a benchmark index over the identical period.
Warnings
- ▲CAGR hides volatility: two assets with the same CAGR can have very different drawdowns.
References & Standards
Geometric mean returnGIPS performance presentation principles
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