# CAGR Calculator

CAGR is the rate of return that would be required for an investment to grow from its beginning balance to its ending one. 5paisa CAGR calculator shows you the average rate of return on your investments over a year.

• ₹ 1k
• ₹ 1Cr
• ₹ 1k
• ₹ 1Cr
Yr
• 1Yr
• 50Yr
•   Final Investment
•   Initial Investment

• Initial Investment
• ₹4,80,000
• Final Investment
• ₹3,27,633
• CAGR is
• % 8.00

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The annual increase of an investment over a given period of time is referred to as the compound annual growth rate, or CAGR. It is assumed that the investment's value would compound over time. CAGR considers the time worth of money, in contrast to absolute return. It can therefore represent the true profits on an investment made over the course of a year.

The CAGR illustrates the value growth of an investment over time. Put simply, it provides you with the annual return on your investment over a certain period of time. Compounded Annual Growth Rate, or CAGR for short, is a metric frequently used to assess a company's performance in the very competitive market. A compound growth rate calculator is an essential tool for investors, providing accurate estimates of returns over time by factoring in compounding effects.

It shows the expansion of an organization, and a CAGR calculator online makes it simple to determine the growth rate—or lack thereof.

Although there are many such calculators online, ease of use is crucial when figuring out CAGR returns. With 5 Paisa's online CAGR calculator, you can compute your company's CAGR in an accurate and systematic manner.

The following formula can be used to determine the CAGR:
Three factors affect the calculation above: the number of years (N), the initial value, and the final value.
The rate of return on investment is provided by the CAGR calculator online upon entry of the three variables.
For instance, your investment starts at Rs. 20,000 and ends up costing Rs. 40,000 after five years (N= five years).

The formula to compute CAGR is CAGR = (40,000/20,000)^(1/5) – 1 CAGR = 14.87%.
The CAGR calculator can also be used to determine the investment's absolute return:
End Value = Starting Value * 100 * Beginning Value

I'll give you an example: (40000 – 20000)/20000 * 100 = 100%

CAGR = [(Ending Value/Beginning Value) ^ (1/N)]-1

- CAGR = Compound Annual Growth Rate
- Beginning Value of the Investment
- Number of Years of Investment
-N = Number of Years of Investment

CAGR calculator online is a helpful tool to determine your investment's compound annual growth rate over time. The compound annual growth rate calculator helps in making informed financial decisions. To calculate the CAGR, you must enter the following three variables:

● The originally invested amount
● The anticipated eventual investment value
● The number of years

A useful tool for figuring out the compound annual growth rate of an investment over time is the Compound Annual Growth Rate (CAGR) calculator. To calculate the CAGR, you must input the original investment value, the projected investment value at maturity, and the number of years.

You can enter the starting and ending values of the investment in the formula box of the CAGR calculator. The number of years for the investment must also be chosen. The annual rate of growth of your investment will be displayed by the CAGR calculator. CAGR is a useful tool for comparing an investment's return to a benchmark.
The CAGR reveals a number of your company's hidden dimensions. Its idea differs from that of the absolute return notion since the latter computes growth over the full investment period. However, because it takes into account the growth in wealth year over year (YoY), CAGR is significantly more accurate. You also save time and money because the 5 paisa CAGR calculator is accessible at any time and is free of charge.

The 5 Paisa CAGR Calculator can help you choose wisely when it comes to investments. It aids in figuring out your investments' yearly rate of return. You can evaluate your investment choices by comparing the investment's returns to an appropriate benchmark.

-Simple and user-friendly, the 5Paisa CAGR Calculator is a useful tool. All you have to do is enter the investment's period, initial, and end values. You can see the compound annual growth rate on the calculator.

-You may compute the returns on your mutual fund investments with the aid of the CAGR calculator. The average yearly growth rate of the mutual fund over time can be compared to a benchmark. It enables you to select a mutual fund by looking at previous performance.

-The compound annual growth rate can also be used to compare the performance of companies to that of their rivals or the industry at large.

-To find out how the investments in your portfolio have done over time, you can utilize the CAGR.

It is not difficult to locate or use the CAGR return calculator. Using a compound growth rate calculator helps to evaluate the performance of investments, allowing users to determine how an investment grows annually with compounded interest. To utilize the 5paisa CAGR return calculator, follow these steps:

● To access the compound annual growth rate calculator page, click this link.

● The initial investment can be typed or selected in the designated field.

● Enter or select the total amount invested.

● Fill in the box with the investment figures' duration by typing or selecting them.

The calculator will instantly deliver you a comprehensive report that includes the following:

● Initial investment

● Total investment

● Length of time over years

Whether planning for long-term financial goals or analyzing market trends, the compound growth rate calculator proves invaluable.

The Formula to calculate CAGR is as follows:

CAGR = (FV / PV)1/n - 1

Here,
The FV is the future value of the investment of an organization

PV is the present value of the organization's investment

N is the period in years over which the analysis takes place

You can easily find out the CAGR in real-time of any organization by entering the following variables:

● The initial investment of the organization
● The value of the investment after its growth
● The time duration of the investment in years

Example for the calculation of CAGR  (To optimize keyword effectiveness, we suggest revising the content to enhance keyword density.)

The PV or the initial investment of Togo and Pogo was INR 2L. It reflected growth in investment value (FV) to 24L in 10 years, so what is the CAGR of Pogo & Togo?
(24, 00,000/200,000)/ 1/10 - 1 = 28.21)

To derive the CAGR percentage multiply the above amount by 100, and that equals 25.89%.

By regularly using a compound growth rate calculator, individuals can make informed financial decisions, comparing various investment options.

1. The CAGR calculator for stocks helps you to know how profitable your investments are and how you can use them to earn more in the future

2. The calculator not only calculates the growth of investment in an organization but can help an individual investor to decide on how much to invest in which equity or fund to earn a higher ROI

3. The calculator enables you to evaluate the growth of your various investment in comparison with relevant indices to know of an increase or decrease in your wealth

4. Depending on how well you are doing, you can bring in long-term cash inflows to help you expand and grow

5. You can compare the results the calculator reports and use it to compare your success with your competitors

7. You can estimate or forecast the future growth of your organization

Consistently applying a compound growth rate calculator can lead to better financial management and strategy development. A compound annual growth rate calculator is an essential tool for measuring the consistent growth rate of an investment over time.

By using a compound annual growth rate calculator, investors can determine the year-over-year growth rate of their investments. While Compound Annual Growth Rate is an important concept, it has certain downsides too. Some of the limitations of CAGR include-

Actual CAGR differs from expected CAGR
Compound Annual Growth Rate assumes growth to be constant throughout the entire time horizon of investment. This may yield results that significantly differ from the actual situation with a highly volatile investment. What this means is when using a shorter duration, the actual Compound Annual Growth Rate may differ from the expected one because of inconsistency in the anticipated rates of return with those of the past.

Another limitation is that it does not take into consideration the change in value caused by investor decisions to further fund or liquidate the asset. Put simply, the Compound Annual Growth Rate doesn't consider account additions or withdrawals. So, if an investor adds funds to his portfolio, it leads to an inflated CAGR, whereas if he deletes funds from his portfolio, it leads to a deflated CAGR.

Suitable for lump sum investments
Compound Annual Growth Rate is mainly suitable for a lump-sum investment. This is because, in the case of SIP investments, the systematic investment at various time intervals is not taken into consideration as only the beginning value is taken into account for CAGR calculation.

Does not account for the investment risk
Another limitation is that it does not account for the inherent risk of an investment. When it comes to equity investment, risk-adjusted returns are more important than CAGR.

You can use CAGR to evaluate an investment's performance over a three to five-year period. It aids in calculating the internal rate of return (CAGR) of your assets and displays the geometric mean return while accounting for compound growth.

CAGR calculator is an online tool that helps you analyze your investments and allows you to calculate the Compound Annual Growth Rate depending on the data entered by you. Apart from telling you whether your investment is earning more than the fund's cost, the CAGR calculator also tells you the rate at which your invested amount is compounding.

You can calculate Compound Annual Growth Rate online with the help of a CAGR Calculator. All you need to do to calculate the CAGR online is enter the beginning and ending value of your investment and its overall tenure of it in the calculator. The CAGR calculator will then find the CAGR return % of your investment.

The formula to calculate Compound Annual Growth Rate is:

((Ending value/beginning value)^(1/period)-1)

The key benefit of the CAGR calculator is that it allows you to do multiple iterations without any charge, to help you in better decision-making about your investment. Further, the online Compound Annual Growth Rate calculator generates the result in a few seconds, thus saving you a great deal of time. The calculator allows you to simply compare the returns of your portfolio along with comparing your CAGR returns with your cost of capital.

Using the CAGR calculator is pretty simple.

Enter the values including the original value of the investment, the final value of the investment, and the duration of the investment.

This is it! The CAGR calculator will show you the results immediately.

Yes, the Compound Annual Growth Rate calculator is free for use without any restrictions on how many times you use it.

In most cases, a CAGR return of more than 10% is considered good. Additionally, it also depends on the type of instruments used for investment. For instance, if an investment is made in equity instruments, a Compound Annual Growth Rate return of 15-25% is considered good.

Whereas in the case of fixed instruments, a Compound Annual Growth Rate return of 8-10% is considered good. To be able to know if your investment return is good or not, you can calculate it using a CAGR Calculator online.

No, there is no benchmark or threshold for CAGR. You can, in fact, compare CAGR returns to benchmark returns, which could be your index returns or risk-free rate of return. You can use a Compound Annual Growth Rate calculator to know if the CAGR returns of your investment are more than the actual cost of funds.

No, CAGR is not an indicator of investment risks for investors. You need to compare your Compound Annual Growth Rate return to the benchmark return to be able to decide if it is enough to cover your cost of capital.

You can use a Compound Annual Growth Rate calculator to calculate the return percentage in your investment over some time. Whether it is Equity CAGR, mutual fund CAGR or FD CAGR, you should carefully analyze the CAGR return you will be achieving and whether it is sufficient or not. It helps you to make investment decisions based on aspects such as cost and return on investment.

CAGR return is the average return earned on all your investments made in a year.

In general, the Compound Annual Growth Rate is a comparatively better performance indicator than the IRR or Internal Rate of Return since it is indicative of overall financial health and stability.

The biggest limitation of the CAGR formula is that it does not take into account the risk or the uncertainty related to returns on your investment. The Compound Annual Growth Rate formula simply implies that the interim cash flows between the beginning of the investment and its maturity are reinvested as the CAGR formula helps you measure the return rate based on the portfolio’s initial and final balance.

Yes. While absolute return simply gives you the total growth in the investment value and does not consider the period, the Compound Annual Growth Rate or CAGR return gives you the average yearly growth rate in the investment.

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Disclaimer: The calculator available on the 5paisa website is intended for informational purposes only and is designed to assist you in estimating potential investments. However, it is important to understand that this calculator should not be the sole basis for creating or implementing any investment strategy. View More..

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