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Compound annual growth rate of an investment.
The Compound Annual Growth Rate (CAGR) is the constant yearly rate at which an investment would have grown from its starting value to its ending value, assuming profits are reinvested each year.
CAGR smooths out the ups and downs of returns into a single, comparable figure, making it one of the most common ways to describe the performance of an investment over multiple years.
Total growth is the overall percentage increase across the whole period, while CAGR expresses that increase as an equivalent constant per-year rate.
Yes. If the final value is below the initial value, CAGR is negative, indicating the investment shrank on average each year.
No. CAGR compares a single start and end value. For plans with ongoing contributions, use the SIP or investment calculator instead.