CAGR is 41.42%
The CAGR formula to calculate the investments is represented by:
CAGR = (FV / PV) 1 / n – 1
It is a mathematical calculation that determines the real-time CAGR for any organization. The values stand for the following:
| Variable | Description |
|---|---|
| FV | Future Value |
| PV | Present Value |
| N | Time period in years |
CAGR is an acronym for Compounded Annual Growth Rate commonly used in determining how well a business is performing in the fiercely competitive market. It represents the growth of an organisation, and you can easily make out the growth rate, or the lack of it, using a CAGR calculator.
CAGR helps you understand the year-over-year growth rate of an investment over a specified period. It provides a smoothed annualized gain over a given time period, which can be particularly useful when comparing investments or analyzing business metrics.
While CAGR is a useful metric, it's important to note that it assumes a steady growth rate, which may not reflect the actual volatility that occurred during the investment period. It provides a "big picture" view that smooths out the peaks and valleys of the investment's performance.