CAGR Calculator
Measure the smoothed annualized return of an investment over a specific time period.
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About CAGR Calculator
Evaluate the average annual growth rate of your investments over time. The Compound Annual Growth Rate (CAGR) provides a smoothed representation of returns, making it easier to compare different assets on an apples-to-apples basis.
How to Use
- Input the 'Initial Investment Amount' at the start of the period.
- Input the 'Final Investment Value' or current valuation.
- Enter the exact number of 'Years' between the two dates.
- Review the 'Annual Growth Rate' and the visualized smooth growth curve.
Common Use Cases
- Comparing the performance of different mutual funds or stocks.
- Forecasting future business growth based on historical data.
- Evaluating the return on a startup investment or real estate asset.
Technical Details
Uses the geometric mean formula: ((FV / IV) ^ (1 / n)) - 1. This method accounts for the compounding effect over time.
Formula
((Final Value / Initial Value) ^ (1 / Number of Years)) - 1
Frequently Asked Questions
- What is a good CAGR?
- A 'good' CAGR depends on the asset class and time period. Historically, the S&P 500 has had a CAGR of around 7-10% adjusted for inflation.
- Does CAGR include volatility?
- No, CAGR smoothes out volatility to show what the annual return would have been if the investment grew at a steady rate.
100% Private & Secure
This tool runs entirely in your browser using client-side technology. Your files and data are never sent to a server, ensuring 100% privacy and speed.