Calculate the compound annual growth rate of your investment
The compound annual growth rate (CAGR) is a measure of how much an investment grows over time. It takes into account the effect of compound interest, allowing investors to compare different investments more accurately. The CAGR is calculated by taking the n-th root of the total percentage growth rate over n years.
An example will help illustrate how CAGR works. Let's say you invest ₹1,000 in a company that is expected to grow by 10% each year. At the end of 5 years, your investment would be worth ₹1,650. To find the CAGR for this investment, you would input these numbers into the equation: (1,650-1,000)/(1,000/5)-1. This would give you a CAGR of 8%
Calculating an investment's Compound Annual Growth Rate (CAGR) is a critical step in understanding the performance of an investment. It tells us how well a fund has performed over time. It can help us to compare different funds and make informed investment decisions.
The CAGR takes into account not only the investment's return on investment (ROI) in a given year but also the impact of compounding returns over time. This allows investors to compare different investments and determine which offers the best potential for growth.
Knowing your CAGR can help you make more informed investment decisions and better assess your portfolio's overall performance.
A CAGR calculator is a tool used to calculate the compound annual growth rate of a given investment or series of investments. The CAGR is calculated by taking the average growth rate of each investment over a period of time and then dividing that number by the number of years in the period. This gives you a percentage that represents the average annual growth rate of the investment.
CAGR stands for "compound annual growth rate," and it's a metric used to measure the rate of growth of an investment over time. To calculate CAGR, you take the initial investment value, divide it by the ending value, and then raise that number to the power of 1 divided by the number of years.
For example, let's say you have an investment that's worth $100 at the beginning of the year and 120 at the end of the year. The CAGR would be ((120/100)^(1/1))-1, or 20%. The main advantage of CAGR is that it gives you a single number that represents the overall growth rate, which makes it easy to compare different investments.
However, CAGR can also be misleading because it doesn't take into account specific changes that occurred within the investment period. For example, if the investment lost value in some years but still ended up above the initial investment after five years, the CAGR would still be positive. As a result, CAGR should be used as one metric among many when evaluating an investment.
CAGR calculator can be used by individuals and professionals. It is used to calculate the compound annual growth rate for a given investment or series of investments.
Individual investors can use this calculator to measure the performance of an investment over time. By using the CAGR calculator, investors can see how their investment has grown over time and make informed decisions about whether or not to continue investing in that asset.
Professionals use the CAGR calculator in the investment industry. By calculating the CAGR for different investments, professionals can make more informed decisions about which investments to make and which to avoid. The CAGR calculator can also help professionals determine the value of an investment over time.
The Equirus wealth CAGR calculator is an online tool that can help you calculate the compound annual growth rate (CAGR) of your investment portfolio. To use the calculator, simply enter the starting value of your portfolio, the ending value, and the number of years over which the investment was held. The calculator will then provide you with the CAGR for your portfolio.
The CAGR is a useful metric for assessing the performance of an investment over time, and it can be helpful in making decisions about future investments. If you are looking to maximize the growth of your wealth, then investing in a portfolio with a high CAGR is a good option. The Equirus wealth CAGR calculator can help you identify portfolios with a high potential for growth.
A CAGR calculator is a valuable tool for measuring the rate of return on investment. This type of calculator allows you to input the beginning and ending values of an investment, as well as the number of years you would like to measure the return over. The calculator will then provide you with the compound annual growth rate for your investment. This information can help you make informed decisions about your investments and ensure that you are getting the most out of your money. Some of the prime benefits are: