CAGR Calculator

A Compound Annual Growth Rate (CAGR) calculator is a tool used to determine the average annual growth rate of an investment over a specific period of time. The CAGR is a useful metric for evaluating the performance of an investment or measuring the growth of a business or financial asset. To calculate the CAGR, the calculator requires three inputs: 1. Initial Value: The starting value or investment amount at the beginning of the period. 2. Final Value: The ending value or investment amount at the end of the period. 3. Number of Years: The duration of the investment or the time period over which the growth occurred. Using these inputs, the CAGR calculator applies the following formula: CAGR = ((Final Value / Initial Value) ^ (1 / Number of Years) - 1) * 100 The formula calculates the growth rate by dividing the final value by the initial value, raising it to the power of the inverse of the number of years, subtracting 1, and then multiplying by 100 to express the result as a percentage. The CAGR represents the average annual rate at which the investment has grown over the specified period. It provides a standardized way to compare the performance of investments or assets with different time durations or growth patterns. By using a CAGR calculator, investors, financial analysts, and business professionals can assess the growth potential, evaluate investment returns, and make informed decisions based on the historical growth rates of different assets or investments. It is important to note that the CAGR assumes a steady growth rate over the entire period, which may not always reflect the actual volatility or fluctuations within the investment's performance. Additionally, the CAGR does not consider any interim variations or compound interest earned during the period, focusing solely on the average annual growth rate.