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Calculate Compound Annual Growth Rate (CAGR) for your investments.
Compound Annual Growth Rate (CAGR) is the best way to measure the performance of an investment over time. Unlike simple absolute returns, CAGR accounts for the effect of compounding, giving you a normalized annual rate.
Formula: [(Ending Value / Beginning Value) ^ (1 / Years)] - 1
Compound Annual Growth Rate (CAGR) is the best way to measure the mean annual growth of an investment over time, smoothing out volatility. This tool calculates the annualized return given the starting value, ending value, and the time period. It's essential for comparing different investment assets.
Absolute return doesn't account for the time it took to get those returns. CAGR allows you to compare a 50% return over 5 years vs. a 20% return over 2 years.
No, standard CAGR assumes a single investment at the start and a single exit value.