Compound Annual Growth Rate

The compound annual growth rate (CAGR) is a useful measure of growth over multiple time periods. It can be thought of as the growth rate that gets you from the initial investment value to the ending investment value if you assume that the investment has been compounding over the time period.

For Example,

Johnty Rhodes bought a house for $1200000 in 1991, now buyers are ready to buy that for $5500000 (in 2016).

Beginning Value : 1200000

Ending Value : 5500000

No. of periods : 25

So his investment grew by 16.5 % per annum, and in the same year (1991)

He also bought "BlueChip mutual fund" for $1000 and it's value in 2016 is $253000

Beginning Value : 1000

Ending Value : 253000

No. of periods : 25

this investment grew by 24.7%.

Use this app to know the CAGR and plan your investments.

Thanks.