CAGR Calculator Online
A CAGR calculator is an online tool that calculates an investment's Compound Annual Growth Rate (CAGR) over a specific period. The Calculator takes two values: the investment's Present Value and the investment's Future value, as well as the number of years that the investment has held. It then uses a formula to calculate the CAGR, which can express as a percentage.
What is the CAGR (Compound Annual Growth Rate)?
One of the most effective ways to evaluate investment returns is by calculating the Compound Annual Growth Rate (CAGR). CAGR is a widely used financial metric that measures the annual growth rate of an investment over a specified time, taking into account the effects of compounding
How to Calculate CAGR(Compounded Annual Growth Rate)?
CAGR is a simple yet powerful metric that helps investors evaluate the profitability of an investment over time. The formula for CAGR can represent as:
CAGR = (FV / PV) 1 / n – 1
It is a mathematical calculation that shows the real-time CAGR for any organization.
FV:Future Value
PV:Present Value
N:Time in Years
For example
Let's say you invested Rs 10,000 in a mutual fund five years ago, and the ending value of your investment today is Rs 15,000. The CAGR calculation for this investment would be:
CAGR = [(15,000 / 10,000)^(1/5)] - 1 = 8.14%
It means your investment has grown at an annualized rate of 8.14% over the past five years.
How to use the CAGR calculator?
Enter the Present Value, Future Value, and your investment period. The Calculator will then generate the CAGR value for you.
CAGR Calculator Benefits
Accurate and Reliable Calculation: A CAGR calculator uses a mathematical formula to calculate CAGR, eliminating the possibility of human error and ensuring that your calculations are accurate and reliable.
Time-Saving: Calculating the CAGR manual can be time-consuming, especially when analyzing multiple investments. A CAGR calculator can save you time by automating the calculation process.
Facilitates Decision-Making: CAGR is an important metric that helps investors evaluate the profitability of their investments over time. Using a CAGR calculator, you can quickly and easily compare the CAGR of different investments and make knowledgeable decisions about where to invest money.
Factors to Consider While Using a CAGR Calculator
Ease of use: The Calculator should be easy to use & navigate, with clear instructions and an instinctive interface.
Accuracy: The Calculator should be accurate and reliable, with a proven track record of producing consistent results.
Availability: The Calculator should be accessible online or through a software program.
Additional features: Some calculators offer additional features, such as calculating other financial metrics or comparing multiple investments.
Conclusion
CAGR is an essential metric that helps investors evaluate the profitability of their investments over time. By using a CAGR calculator, investors can quickly and accurately calculate the CAGR of their investments, saving time and facilitating decision-making.
FAQ'S
What is a CAGR Calculator?
A CAGR Calculator is an online financial tool that helps investors calculate their investments' Compound Annual Growth Rate (CAGR) over a specific period. It Calculator a financial metric that measures the annual growth rate of an investment.
What are the benefits of using a CAGR calculator?
A CAGR calculator offers several benefits, including accuracy, time-saving, and facilitating decision-making. It can save investors time and provide accurate and reliable calculations for making informed investment decisions.
Can a CAGR calculator be used for any investment?
Yes, we can use it.