CAGR Calculator - Measure Your Investment Growth
CAGR Calculator - Measure Your Investment Growth
The Compound Annual Growth Rate (CAGR) calculator helps you determine the mean annual growth rate of an investment over a specified period of time, assuming the profits were reinvested at the end of each period. CAGR is a valuable metric for comparing the performance of different investments or tracking your portfolio's progress over time.
Simply enter your initial investment value, the final value, and the number of years. The calculator will instantly show your average annual growth rate, making it easy to evaluate and compare investment opportunities.
Examples
Example 1: Stock Investment
Input: Initial Value: $10,000, Final Value: $16,105, Years: 5
Output: CAGR: 10%
An investment that grows from $10,000 to $16,105 in 5 years has a CAGR of 10%.
Example 2: Mutual Fund
Input: Initial Value: ₹50,000, Final Value: ₹80,000, Years: 4
Output: CAGR: 12.37%
A mutual fund investment that increases from ₹50,000 to ₹80,000 in 4 years yields a CAGR of approximately 12.37%.
Frequently Asked Questions
What is CAGR?
CAGR stands for Compound Annual Growth Rate. It represents the average annual growth rate of an investment over a specified period, assuming the profits are reinvested each year.
How is CAGR calculated?
CAGR is calculated using the formula: ((Final Value / Initial Value) ^ (1 / Years)) - 1. The result is usually expressed as a percentage.
Why is CAGR important?
CAGR provides a smoothed annual rate of growth, making it easier to compare the performance of different investments or funds over time, regardless of volatility.
Can CAGR be negative?
Yes, if the final value is less than the initial value, the CAGR will be negative, indicating a loss over the period.