Summary
Total Invested Rs 0
Final Value Rs 0
Gains Rs 0
CAGR Return 0%
Absolute Return 0%
| Year | Invested | Gain | Final Value |
|---|
What is CAGR?
CAGR (Compound Annual Growth Rate) shows the average yearly growth of your investment over a specific time period. It tells you how much your investment grows every year on average, instead of just showing total profit.
CAGR vs Absolute Return
Many people only look at total profit (absolute return). This shows how much your investment increased overall, but it does not show yearly performance.
For example, if you invest PKR 20,000 and it becomes PKR 35,000 in 5 years, your total return is 75%. But this does not tell how much it grew each year.
CAGR solves this problem by giving you the annual growth rate, making it easier to understand real performance.
CAGR Formula
The formula used to calculate CAGR is:
CAGR = (Final Value / Initial Value)^(1 / Years) – 1
Benefits of CAGR Calculator
✔ Accurate Growth Measurement
CAGR includes time, so it gives a more realistic growth rate compared to simple returns.
✔ Easy Comparison
You can compare different investments like stocks, mutual funds, or business profits.
✔ Better Financial Planning
It helps you understand how your money grows yearly and plan future investments wisely.