WHAT IS CAGR CAGR
What Is CAGR (Compound Annual Growth Rate) Compound Annual Growth Rate (CAGR) is a commonly used financial measure that shows the average annual rate at which an investment grows over a specific period. It assumes that the investment grows at a consistent rate and that the returns are compounded over time. Unlike looking at the return for each individual year, CAGR converts the overall growth of an investment into a single annualised rate. This makes it easier to understand long-term performance and compare different investments. How to Calculate CAGR Calculating CAGR is relatively simple when you know the starting value, ending value, and investment period. The CAGR formula is: CAGR = [(EV / BV)^(1/n) − 1] × 100 Where: BV = Beginning Value of the investment EV = Ending Value of the investment n = Number of years the investment was held Steps to Calculate CAGR Step 1: Identify the beginning and ending values Find out how much you initially invested and what the investment was worth ...