[ Tool ]
Find the compound annual growth rate — the steady yearly return that took an investment from its starting value to its ending value — so you can compare investments held for different periods.
Reviewed by the OptionX Research Team · Updated July 2026
CAGR
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CAGR assumes smooth, reinvested growth and ignores interim cash flows — for investments with additional buys or withdrawals, use XIRR. For information only — not investment advice.
CAGR converts a total gain into a single annual rate, letting you compare returns across investments held for different lengths of time.
Formula
CAGR = (Final ÷ Initial)1/t − 1
where t = number of years. Multiply by 100 to express it as a percentage.
Compare like-for-like
Because CAGR is annualised, you can fairly compare a 3-year and a 10-year investment side by side.
Hides volatility
CAGR smooths the journey — two assets with equal CAGR can have very different year-to-year swings.
Use XIRR for cash flows
If you added or withdrew money along the way, XIRR reflects the true return more accurately than CAGR.
FAQs