CAGR Calculator is free online tool to calculate compound annual growth rate for your investment over a certain time period. CAGR is a measure of the average yearly growth of your investments over a certain time period.
It tells you the average rate of return you have earned on your investments every year. CAGR is very useful for investors because it is an accurate measure of investment growth (or fall) over time.
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What Is CAGR ?
CAGR (Compound Annual Growth Rate) measures your investments’ average annual growth over a given period. It shows you the average rate of return on your investments over a year.
CAGR is a helpful tool for investors because it precisely measures investment growth (or decline) over time. When calculating CAGR, profits are assumed to be reinvested at the end of each year of the time horizon. Therefore, CAGR is a representative number, not an accurate return.
In most cases, an investment cannot grow at the same rate year after year. Despite this, the CAGR calculator is widely used to compare alternative investments.
Keeping this common application of the calculation in mind, it is prudent that investors find a convenient way to calculate CAGR.
Anyone who wants to estimate the return on investment can use the CAGR calculator. The Compound Annual Growth Rate formula is used in this application’s calculations (CAGR formula).
For example, if you have a mutual fund that has appreciated over time, you can use the calculator to determine the rate of return on your investment. The CAGR return calculator will provide you with an annual growth rate that you can compare to a benchmark return.
CAGR Calculator Online Benefits
There are multiple benefits of using CAGR calculator. Let’s look at them one by one and understand how you can use the online CAGR calculator to make informed investment decisions.
To evaluate growth of an investment or business over time – Unlike in absolute returns, CAGR calculation takes into account the element of time.
So CAGR works as a more precise indicator of growth over time. Whether you have your own business or you have invested in some financial product, you can look at CAGR to find out how your money has grown every year over a certain period.
To compare performance of multiple investment products – CAGR formula can be used to compare multiple investment products more accurately than absolute returns.
Thus, CAGR calculator as a tool can come handy for investment comparison.
How to Use
CAGR Calculator is free online tool to calculate compound annual growth rate for your investment over a time period.
To get the compound annual growth rate value for your investment, enter the starting value or initial investment amount along with the expected ending value and the number of months or years for which you want to calulate the CAGR.
Next, click on calculate button and let the online CAGR calculator calculate the value for you. It tells you, how much your intial investment has grown over the selected course of time along with bar chart for more clear picture of your annually or periodically growth.