Don’t waste your time – keep track of how NFP affects the US dollar!

Data Collection Notice

We maintain a record of your data to run this website. By clicking the button, you agree to our Privacy Policy.

facebook logo with graphic

Join Us on Facebook

Stay on top of company updates, trading news, and so much more!

Thanks, I already follow your page!
forex book graphic

Beginner Forex Book

Your ultimate guide through the world of trading.

Get Forex Book

Check Your Inbox!

In our email, you will find the Forex 101 book. Just tap the button to get it!

FBS Mobile Personal Area

market's logo FREE - On the App Store

Get

Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

79% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider.

You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

Compound Annual Growth Rate

Compound Annual Growth Rate (CAGR)

What is CAGR?

The compound annual growth rate or in short, CAGR, is one of the most precise methods to calculate and define returns for an investment over some period.

What CAGR can tell an investor

The compound annual growth rate doesn’t represent the exact return rate, it should be rather viewed as a representational figure. So, the CAGR is a number that shows the rate at which an investment would have increased its value if it had grown at the same rate every year. That’s assuming the earnings were reinvested at the end of each year. Some may argue that it’s unreal for an investment to grow at the same rate every year, and they will be right! The CAGR is usually used to smooth fluctuations of returns for a better understanding.

Formula of CAGR

CAGR = ((value at the end / value at the beginning /) 1 / number of years – 1) x 100

CAGR example

Let’s say a random person has invested $10,000 in a stock portfolio with the following returns:

  • From 2018 to 2019, the portfolio grew to $13,000 (the 30% annual growth).
  • From 2019 to 2020, the portfolio grew to $14,000 (the 7.69% growth).
  • Finally, the portfolio rose to $19,000 in 2021 (or 35.71% from 2020 to 2021).

Let’s calculate the CAGR using the formula above.

CAGR = (($19,000 / $10,000 /) 1 / 3 – 1) x 100 = 23.86%

The compound annual growth rate of 23.86% over three-year investment period allow an investor to evaluate past performance, compare options for the capital, and also make predictions for future investment value.

Back

2022-04-13 • Updated

Choose your payment system

Feel the Team Spirit

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later