CAGR calculator- Calculate Percentage(%) of Return

This is an online CAGR calculator, calculate the compound annual growth rate or the return percentage of your investments.

What Is CAGR Calculator?

The Full form of CAGR is the compound annual growth rate. you can calculate annually compounded growth % using the CAGR calculator online.

You have to put an invested amount and future return amount and the number of the year, the calculator will show you, how much average interest rate you will get.

Why I used the average interest rate? because if you invest for 3 years in a mutual fund or in the share market, so assumed, first you have got 10% interest, 2nd year 20% and 3rd year 3%.

So, the average of the 3 years’ interest is 11%. that why this CalC will show you the average of the investment period.because investment in the stock market or mutual fund, there is no such fixed return percentage in every year. you can just calculate the historical average return in the SIP calculator. or in the CAGR calculator, if you invest some amount. so, you can use the check how much percent return you can get annually.

How to use this online CAGR calculator

  • Investment Amount: to use this calC. you have to put the invested money, so in this field, you can put the principal money are going to invest or you have already invested.
  • Return Amount: and in this field put the return amount you are expecting after ending the investment period.
  • Year of investment: in this field put the number of years that you will invest your money.
  • CAGR: this is the result field. this field will display the percentage of the return you got of your investment annually.

Formula

The CAGR formula is = [{(Return amount/ Investment amount)^ (1/ year of investment)} -1]

Understanding of compound annual growth rate

When we are investing in the stock market or any other securities, where you can see the principal money and return value, but the calculation of the CAGR calculator will display you the % of return you got annually.

Or if you are investing in the securities, and you want to archive your targeted maturity amount, so how much percentage of annual growth of your principal amount can touch your targeted value.

In both scenarios, this calculation will help to get the proper decision.

Example:

assumed that you have invested $100 in the stocks in 2020.

  • so after 1 year later (2021)(between 2020 to 2021), you got 25% return of your principal amount. so the $100+25%= $125.
  • and second-year (2022) you got 20% return of your total ( between 2021 to 2020). so the $125 +20%= $150. so in the second year is $150.
  • and in the 3rd year(2023) (between 2022 to 2023), you got 18%. so the calculation will be $150+ 18%=$177. so after 3 years later, your total wealth will be $177.

But in the 3 years of investment, there is no fixed % of the return. so you can use the Compound Annual Growth Rate formula and get an average of 3 years growth rate percentage.

But earnfo.com helps you to put your initial invested value and after some years later created wealth value. and get the growth rate.

If you put above the values in our online CalC ($100 and $177, years 3) result will be 20.96%.

Using formula = [{($177/$100)^(1/3)}-1]×100
% of growth = 20.96%

Uses of this calculator

  • Investors can use this to calculate the average growth of the investment.
  • The fund manager can use this.
  • in the mutual fund, this is helpful to show the historical growth rate, and that why you can be expected the same growth rate. and calculate your expected return in the future.
  • in saving account, you can check % of growth. but saving account is the fixed percentage of growth so that this s not much useful.

Limitation

CAGR Calculator will not show you the absolute return of the principal amount which you have invested. that why it is difficult to understand what is the total percentage of the principal amount you got after a specific period of time.

Example

  • assume you have invested $200 in 2018.
  • in 2019 the wealth is $180.
  • and in 2020 the wealth is $160.
  • in 2021 the wealth is $150.
  • in 2022 your wealth is $190.
  • and in 2023 your wealth is $260.

So, that, you got a return of 30% of your invested amount in the last 5 years but in this CAGR percentage is 5.39%. that means this will not show our total growth rate.

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