Compound Annual Growth Rate Calculator Online
CAGR (in percentage %):
What is CAGR?
CAGR, or Compound Annual Growth Rate (CAGR) Calculator Online, shows how much your investment grows each year over a specific time. Unlike simple returns, CAGR considers the power of compounding and gives you a more accurate picture of your investment’s yearly growth. It helps you understand how much your money has really earned, year over year.
What is a CAGR Calculator?
A CAGR calculator is a handy tool that tells you the annual growth rate of your investment. Just enter your investment’s starting value, ending value, and the number of years. It’ll do the math and show your average yearly return.
You can also compare your returns with other investments or benchmarks using this tool.
How Does a CAGR Calculator Work?
The formula for CAGR is:
CAGR = (Ending Value / Beginning Value)^(1/N) – 1
Where N is the number of years.
Example:
Initial Investment = ₹15,000
Final Value = ₹25,000
Time = 3 years
Time = 3 years
You can also check the absolute return: ((25,000 – 15,000) / 15,000) × 100 = 66.66%
Limitations of CAGR
While CAGR is useful, it has a few drawbacks:
It only considers the start and end values, ignoring any ups and downs in between.
It works best for lump-sum investments, not for SIPs or staggered investments.
Frequently Asked Questions:
CAGR stands for Compound Annual Growth Rate. It shows the average yearly growth of an investment over a specific time period.
CAGR shows the average growth rate per year, while compound interest calculates the actual value accumulation over time, including compounding frequency. CAGR = 14.47%
You’ll need the initial investment amount, the final value, and the number of years the investment was held.
Yes. It’s especially useful for understanding the annual growth rate of equity investments like stocks, mutual funds, or SIPs.
CAGR helps compare the performance of different investments by showing a consistent growth rate, making it easier to evaluate which asset offers better returns.
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