Free Calculator
Absolute Return to CAGR Calculator
Convert absolute returns to Compound Annual Growth Rate (CAGR) for better investment comparison
Investment Details
Initial Investment
₹0
Final Amount
₹0
Absolute Return
0%
CAGR
0%
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How it works
How this calculator works
Doubling your money (a 100% absolute return) is a CAGR of about 14.9% a year over 5 years, or about 7.2% a year over 10 years.
- 1
Enter initial investment value
Input the amount you invested at the start, for example the purchase price of the mutual fund units.
- 2
Enter final value
Input the current or redemption value of your investment. Alternatively, enter the absolute return percentage directly.
- 3
Enter the holding period
Type in the number of years and months you held the investment.
- 4
View CAGR
The calculator shows the annualised CAGR, which you can now compare fairly against any other investment regardless of holding period.
Fair questions
Frequently asked questions
Absolute return is the total percentage gain on an investment regardless of time period (e.g. 80% over 6 years). CAGR (Compound Annual Growth Rate) annualises that gain, showing the equivalent steady annual rate (e.g. 80% over 6 years = 10.4% CAGR per year). CAGR is essential for fair comparison because it accounts for the holding period.
Absolute return is misleading when comparing investments held for different periods. A fund that returned 150% over 10 years (10.7% CAGR) is actually underperforming one that returned 80% over 5 years (12.5% CAGR), even though 150% sounds much better. CAGR puts all investments on the same annual scale.
CAGR = (1 + Absolute Return ÷ 100)^(1 ÷ Years) − 1. For example, 100% absolute return over 7 years: CAGR = (1 + 1)^(1/7) − 1 = 2^0.143 − 1 = 10.4%. Our calculator does this instantly for any input.
No. CAGR assumes a single lump-sum investment at the start and one redemption at the end. XIRR (Extended Internal Rate of Return) handles multiple cash flows at different dates — such as SIPs or multiple purchases and redemptions. CAGR is appropriate for a single lump-sum investment; XIRR is more accurate for SIPs.
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Reviewed by Ekatra's home-loan experts · Calculations are indicative; consult a financial advisor for personalised advice.
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