CAGR Calculator
Calculate the Compound Annual Growth Rate (CAGR) of your investments over time.
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Financial Disclaimer
Information provided on WealthMaze is for educational purposes only. All return calculations are estimates based on user inputs. Not financial advice.Calculation Output & Analysis
Visualizing Your Growth
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4Benefits of Compound Annual Growth Rate (CAGR)
Our CAGR Calculator calculates the Compound Annual Growth Rate of your portfolio. CAGR represents the smoothed annualized rate at which an asset grows if it grows at a steady rate over a specified time period, assuming all profits are reinvested. It provides a standardized metric to compare different assets.
How to calculate CAGR with the formula?
CAGR is calculated mathematically as: **CAGR = ( Final Value / Initial Value )^(1 / t) - 1** Where: - **Final Value** = Value at the end of the period - **Initial Value** = Initial investment amount - **t** = Number of years (can be fractional) Unlike simple returns, CAGR accounts for compounding, preventing distortions caused by volatile swings.
Frequently Asked Questions (FAQ)
Why is CAGR better than Absolute Return?
Absolute return ignores the time value of money. An absolute return of 100% sounds great, but if it takes 15 years to achieve, it corresponds to a modest CAGR of only ~4.7%. CAGR normalizes growth per year.
How do I calculate CAGR online?
Enter your initial purchase value, final sale value, and holding tenure in years into the CAGR calculator to see your annualized returns.