# CAGR (Compound Annual Growth Rate)

CAGR (Compound Annual Growth Rate) is a measure of the average rate of growth of an investment over a specific period of time. It takes into account the effect of compounding interest over time and provides a more accurate representation of the overall return on investment.

To calculate CAGR, you can use the following formula:

CAGR = (Ending value / Beginning value)^(1 / number of years) – 1

where,
Ending value = the value of the investment at the end of the investment period
Beginning value = the value of the investment at the beginning of the investment period
Number of years = the total number of years over which the investment was held

For example, if you have made an investment of Rs. 1,00,000 and the ending value of the investment after 5 years is Rs. 1,50,000, the CAGR can be calculated as follows:

CAGR = (1,50,000 / 1,00,000)^(1/5) – 1
CAGR = 0.1038 or 10.38%

So, the CAGR for this investment is 10.38% per annum.

Alternatively, you can use an online CAGR calculator or spreadsheet software like Microsoft Excel to calculate the CAGR.