Compound Annual Growth Rate Calculator
CAGR stands for Compound Annual Growth Rate, which is a commonly used financial metric to measure the average growth rate of an investment over a specified period of time. It's calculated as the average rate of return that would have to be compounded annually to reach the final value from the initial value over the given time period. CAGR is expressed as a percentage and it is useful in comparing the growth of different investments. It provides a more accurate picture of the growth of an investment than simple average returns, as it takes into account the compounding effect of reinvested returns.
Initial Investment
Final investment Value
Duration of Investment
Calculate
You have gained ₹ 9,00,000 over the period of 10 years.
CAGR
25.89%
Absolute Returns
900%
How to use this calculator?
Compound Annual Growth Rate
CAGR stands for Compound Annual Growth Rate, which is a commonly used financial metric to measure the average growth rate of an investment over a specified period of time.
Uses of CAGR
CAGR is the best formula for evaluating different investments' performance over time. Investors can compare the CAGR to determine how well one investment has performed against other investments.
How can CAGR help me?
CAGR lets you know the compounded returns you earn on an annual basis irrespective of the individual yearly performances of the fund. So you can compare the performance of different investments.
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What is CAGR?
CAGR stands for Compound Annual Growth Rate, which is a commonly used financial metric to measure the average growth rate of an investment over a specified period of time. It's calculated as the average rate of return that would have to be compounded annually to reach the final value from the initial value over the given time period.
Why should I calculate CAGR?
CAGR is expressed as a percentage and it is useful in comparing the growth of different investments. It provides a more accurate picture of the growth of an investment than simple average returns, as it takes into account the compounding effect of reinvested returns. CAGR provides a standardised way to compare the performance of different investments over the same time period, which makes it easier to determine which investments have performed better or worse.
How does the calculator work?
It uses the following logic
CAGR =
(
(
Final Inv.
|
Initial Inv.
)
1
-
n
-1
)
X 100
Where:
Final Inv. = Final Investment
Initial Inv. = Initial Investment
N = Number of years
What are the advantages of calculating CAGR?
- Future projections: By using the CAGR of an investment, you can make projections about what the future value of your investment might be, based on past performance. This can help make investment decisions or set financial goals.
- Investment performance evaluation: CAGR helps you to evaluate the performance of your investment over a specified period. It provides a clear picture of the growth or decline of your investment, which can help you make informed decisions about your investments.
- Portfolio analysis: CAGR can be used to analyze the performance of your portfolio as a whole, which can help make adjustments to your investment strategy.
How to use CAGR calculator?
FundsIndia CAGR calculator is an intuitive tool that calculates the CAGR easily. Just plug in the Initial Investment, Final Investment values along with the duration of the investment and the FundsIndia Calculator will give you the accurate CAGR of your investment.