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How do you calculate compound annual growth rate (CAGR)?

The CAGR formula is equal to (Ending Value/Beginning Value) ^ (1/No. of Periods) – 1. The Compound Annual Growth Rate formula requires only the ending value of the investment, the beginning value, and the number of compounding years to calculate.

What is the compound annual growth rate of an investment?

So the compound annual growth rate of that investment was: CAGR = (1300/1000)1/3 − 1 = 9.14% Note that 9.14% is less than 30% / 3 = 10.00%. It is due to the compounding of interest. To understand it, try to follow this example: In May 2015, you deposited $1000 in the bank account with an interest rate equal to 9.14%.

How do you calculate growth rates?

Growth rates are computed by dividing the difference between the ending and starting values for the period being analyzed and dividing that by the starting value. Time periods used for growth rates are most often annually, quarterly, monthly, and weekly. Understanding Growth Rates

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