CAGR Formula
Expression: CAGR = (FV/IV)^(1/n) − 1
Compound Annual Growth Rate smooths volatile returns into a single annual figure. IV=initial value, FV=final value, n=years. Expressed as percentage by multiplying by 100.
Example: Investment doubles in 6 years
IV = ₹1,00,000, FV = ₹2,00,000, n = 6
CAGR = (2,00,000/1,00,000)^(1/6) − 1 = 2^0.1667 − 1
Result: CAGR ≈ 12.25%