What is the difference between CAGR and XIRR?

CAGR works for a single investment with one start and end value. XIRR handles multiple investments made at different times, such as SIP instalments, and gives one annualised return.

For long-term equity investments in India, 10 to 12% is generally considered good. For business revenue, early-stage startups often target 50% or more, while mature companies grow in single or low double digits.

Why is my SIP XIRR higher than its absolute return suggests?

Because many instalments were invested recently and have had little time to grow. XIRR accounts for this timing; absolute return does not.

Can CAGR be negative?

Yes. If the ending value is lower than the starting value, CAGR is negative, showing the average yearly decline.

Free investment tool

CAGR Calculator and SIP XIRR Calculator

Absolute returns can mislead. A 150% gain sounds great, but over how many years? This CAGR calculator turns any start and end value into a compound annual growth rate, so you can compare investments, revenue or user growth fairly.

Free, no sign-up · Last reviewed 12 November 2026

Calculate

Starting value

₹

Ending value

₹

Period

yrs

CAGR

20.11%

Compound annual growth rate.

Absolute return

150%

Total gain

₹1.5 Lakh

Total invested₹1,00,000

Value now₹2,50,000

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Growth at this CAGR

Investing through a SIP? Switch to XIRR mode to find the true annualised return on your monthly instalments, which accounts for when each rupee was invested.

CAGR and XIRR formulas

CAGR = (End value ÷ Start value)^(1 ÷ years) − 1

CAGR: Single annual rate that takes the start value to the end value
XIRR: Annual rate at which all SIP instalments grow to the current value
Absolute return: Total gain as a % of total invested, ignoring time

CAGR suits one-time investments and business metrics measured at two points in time. It smooths out ups and downs in between.

For SIPs, simple CAGR understates returns because later instalments were invested for less time. XIRR solves for the rate that makes the growth of every instalment equal to today's value.

Using CAGR for your business

CAGR is the standard way investors read growth in a pitch deck.

Report revenue, users or GMV growth as CAGR over 2 to 5 years.
Compare your growth with industry benchmarks on the same basis.
Be careful with very short periods; one strong quarter can inflate CAGR.

Questions

CAGR Calculator: frequently asked questions

Compound annual growth rate is the steady yearly rate at which an investment would have grown from its starting value to its ending value over a period, assuming profits were reinvested.