Difference between revisions of "Manuals/calci/CAGR"
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==Description== | ==Description== | ||
| − | A compound annual growth rate (CAGR) measures the rate of return for an investment — such as a mutual fund or bond — over an investment period, such as 5 or 10 years. The CAGR is also called a "smoothed" rate of return because it measures the growth of an investment as if it had grown at a steady rate on an annually compounded basis. | + | *A compound annual growth rate (CAGR) measures the rate of return for an investment — such as a mutual fund or bond — over an investment period, such as 5 or 10 years. |
| − | + | *The CAGR is also called a "smoothed" rate of return because it measures the growth of an investment as if it had grown at a steady rate on an annually compounded basis. | |
==Examples== | ==Examples== | ||
Revision as of 15:03, 22 March 2018
CAGR(StartAmount,EndAmount,NumberOfYearsToEnd,NumberOfYearsToStart)
- is the initial amount of investment
- is the end amount of investment
- number of years of investment
- is the number of years to start
is the initial amount of investment
is the end amount of investment
number of years of investment
is the number of years to start
Description
- A compound annual growth rate (CAGR) measures the rate of return for an investment — such as a mutual fund or bond — over an investment period, such as 5 or 10 years.
- The CAGR is also called a "smoothed" rate of return because it measures the growth of an investment as if it had grown at a steady rate on an annually compounded basis.
Examples
1. =CAGR(1000,10000,3,0) = 1.1544
Over the course of 3 years, your investment grew from 1000.0 to 10000.0. Its compound annual growth rate (CAGR) calculated from the start is 115.44 %.
2. =CAGR(1000,5000,10,5) = 0.3797
Over the course of 10 years, your investment grew from 1000.0 to 5000.0. Its compound annual growth rate (CAGR) calculated from 5th year is 37.97 %.
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