CAGR Calculator

Measure your investment growth accurately with the CalcGami CAGR Calculator. Calculate the Compound Annual Growth Rate to smooth out volatility and compare the performance of mutual funds, stocks, or businesses over time. Save your reports and share them via WhatsApp.

What is a CAGR Calculator?

A CAGR Calculator is a financial analysis tool used to determine the Compound Annual Growth Rate of an investment. Unlike “Absolute Returns,” which simply tell you how much you made in total (e.g., 50%), CAGR tells you the smoothed-out annual rate at which your investment grew to reach its final value.

Investments rarely grow in a straight line. A stock might go up 20% in Year 1, down 10% in Year 2, and up 30% in Year 3. CAGR ignores this volatility. It answers the question: “If this investment had grown at a steady, constant rate every single year, what would that rate be?” This makes it the gold standard for comparing different assets (e.g., Gold vs. Real Estate vs. Stocks) over the same time period. This tool processes your Start Value, End Value, and Duration to give you that precise percentage.

Benefits of Using a CAGR Calculator

CAGR cuts through the noise of market fluctuations. Using this tool offers clearer financial insights:

• Standardized Comparison: It allows you to compare a 3-year mutual fund return against a 5-year fixed deposit return on an equal playing field.
• True Performance: Absolute return can be misleading. Doubling your money (100% return) is great if it took 3 years (CAGR 26%), but terrible if it took 20 years (CAGR 3.5%). This tool reveals the difference.
• Goal Tracking: If your financial goal requires a 12% annual growth, CAGR tells you if your current portfolio is actually hitting that target.
• Business Growth: Use it to calculate revenue growth. “We grew from $1M to $5M in 4 years” translates to a specific annual growth percentage.
• Share with Advisors: Use WhatsApp Share to send the CAGR figure to your financial planner to discuss if your portfolio needs rebalancing.

Formula Used in CAGR Calculator

The formula uses exponents (roots) to determine the geometric progression ratio.

The Variables:

• BV: Beginning Value (Initial Investment).
• EV: Ending Value (Current/Final Value).
• N: Number of Years.

The Plain Text Formula:
CAGR = [ (Ending Value / Beginning Value) ^ (1 / N) ] – 1

• Note: The result is a decimal. Multiply by 100 to get the percentage.

How to Use the CAGR Calculator

Follow these steps to find your annual growth rate:

1. Enter Beginning Value: Input the amount you started with.
2. Enter Ending Value: Input the current value of the investment.
3. Enter Period: Input the duration in years.
4. Calculate: Click the button to process the formula.
5. Review the Result: The tool displays the CAGR percentage (e.g., 14.8%).
6. Use Productivity Features:
   • History: Compare Fund A vs. Fund B.
   • Save Calculation: Store as “Portfolio 2020-2024.”
   • Share on WhatsApp: Send the result: “My portfolio CAGR is 15%!”

Real-Life Example

Scenario:
“David” invested $10,000 inamutualfundexactly 5yearsago.Today,hecheckshisaccount,andthevalueis18,000.$He wants to know his annual growth rate.

The Details:

• BV: 10,000
• EV: 18,000
• N: 5 Years

The Calculation:

Step 1: Divide EV by BV
18,000 / 10,000 = 1.8.
The money grew by a factor of 1.8.

Step 2: Calculate the nth Root
We need the 5th root of 1.8.
Formula: 1.8 ^ (1 / 5)
Exponent: 1 / 5 = 0.2
Calculation: 1.8 ^ 0.2 = 1.1247.

Step 3: Subtract 1
1.1247 – 1 = 0.1247.

Step 4: Convert to Percentage
0.1247 x 100 = 12.47%.

The Result:
David’s CAGR is 12.47%.

• Takeaway: His money effectively grew at 12.47% every year, compounding annually.

Frequently Asked Questions (FAQ)