CAGR Calculator
Calculate the Compound Annual Growth Rate of your investments instantly.
Your Returns
What is CAGR?
The Compound Annual Growth Rate (CAGR) measures an investment’s annual growth rate over time, assuming profits are reinvested at the end of each year. It provides a smoothed rate of return, making it an excellent metric to compare the performance of different investments, regardless of their volatility.
CAGR vs Absolute Return
- Absolute Return: Shows the total percentage of growth or loss over the entire period, ignoring how much time it took.
- CAGR: Takes “Time” into account. Earning a 50% absolute return in 1 year is fantastic, but earning 50% over 10 years is less impressive. CAGR shows you the yearly equivalent.
CAGR is expressed as a percentage, which makes it easier to understand and compare.
Using the CAGR Calculator – A Simple Guide
- What’s the Calculator For? This calculator helps you figure out how your money grows when you save or invest it over time.
- Enter Your Money Goals:
- Start by telling the calculator how much money you want to have in the future. For example, if you want Rs. 1,000,000, just type “1000000.”
- Next, let the calculator know how much money you’re putting in now. This is the amount you’re starting with. If it’s Rs. 500,000, type “500000.”
- Then, tell it how long you plan to keep your money invested. If it’s 5 years, type “5.”
3. Hit the “Calculate” Button: Click the “Calculate” button, and the calculator will do some math for you.
4. Check the Results:
- You’ll see two important numbers:
- Compound Annual Growth Rate (CAGR): This is like the average speed your money is growing every year, shown as a percentage. The higher, the better.
- Absolute Return (%): This tells you how much more money you’ll have compared to what you started with, also as a percentage. A positive number means you’ll make money. This is not year on year return, this will calculate how much you money has grown in the whole time period.
5. What Do the Results Mean?
- CAGR tells you how fast your money is growing on average each year.
- Absolute Return (%) shows you the total extra money you’ll have compared to what you began with, in terms of a percentage.
- Make Informed Decisions: Use these results to help plan your savings and investments wisely. It gives you an idea of how your money can grow over time.
That’s it! The CAGR calculator makes it easier for you to see how your money can grow when you save or invest it. It’s a handy tool for making smarter financial choices.