CAGR calculator tool allows you to calculate Compound Annual Growth Rate (CAGR) and its components such as growth rate, duration, initial or end value. This is useful when your are planning for your business growth or your investment.
You can instantly compute any component of a compound growth and get a representation of the growth in the form of a chart. You can also download this compound interest growth chart as a PNG image which allows you to share it with others or keep as a reference.
Here is a breakdown of different components in a compounded annual growth and formulas for calculating them:
Initial Value = The initial amount invested, also known as principal amount.
Duration = The time (in years) for which the amount is invested, also known as period.
CAGR = The growth rate (%) at which interest is added every year.
Final Value = The final amount after applying growth every year. This is also known as accrued amount or (principal + interest).
CAGR or Compound Annual Growth Rate is calculated for an initial value that is subjected to compound interest over a fixed duration. When you know the initial amount, final amount and the duration of investment, you can calculate the growth rate (CAGR) using the CAGR formula given below.
CAGR = ((Final Value / Initial Value)(1 / Duration) - 1) * 100
Initial Value is calculated in a compound interest over a fixed duration, when you know the final amount, duration of investment, and the CAGR. You can calculate the initial value using the formula given below.
Initial Value = Final Value / (1 + (CAGR / 100))Duration
Final Value is calculated in a compound interest for a given initial amount, CAGR and duration. This is also called reverse CAGR calculation or a compound interest calculation of accrued amount in an investment. You can calculate the final value using the formula given below.
Final Value = Initial Value * (1 + (CAGR / 100))Duration
Duration is calculated in a compound interest when you know the initial amount, final amount, and the CAGR. You can calculate the duration of the growth using the formula given below.
Duration = ln(Final Value / Initial Value) / ln(1 + CAGR/100)
Here `ln` denotes natural logarithm, or loge.