To calculate the Compound Annual Growth Rate (CAGR) for an investment, you can use the following formula:
CAGR = (EV / BV) ^ (1/n) - 1
Where:
- EV = Ending Value
- BV = Beginning Value
- n = Number of Years
For example, if you want to calculate the CAGR for an investment that started with a value of $10,000 and ended with a value of $19,000 over a period of 3 years, you would plug the values into the formula as follows:
CAGR = (19000 / 10000) ^ (1/3) - 1 = 0.1667 - 1 = 0.1667 or 16.67%
This means that the investment grew at a CAGR of 16.67% over the 3-year period.