Calculate Compound Annual Growth Rate (CAGR) for investments. Analyze investment performance with accurate CAGR calculations.
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CAGR = (Final Value / Initial Value)^(1/Time Period) - 1
CAGR shows the annual growth rate of an investment over a specified period.
CAGR (Compound Annual Growth Rate) is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each year.
CAGR considers the compounding effect of returns, while average return is simply the arithmetic mean. CAGR provides a more accurate picture of investment performance over time.
A good CAGR depends on the investment type and market conditions. Generally, 8-12% CAGR is considered good for equity investments, while 6-8% is good for debt investments over the long term.