What is CAGR?
A simple explanation for Indian investors — Wealth Simplified.
Quick Answer
CAGR, or Compound Annual Growth Rate, is the steady annual growth rate that would take an investment from its starting value to its ending value over a period.
Simple Explanation
CAGR smooths returns into one annualised number for comparison.
How It Works
It uses starting value, ending value and number of years in a standard compound-growth formula.
Why It Matters
It helps compare investments over different periods more fairly than a simple total return.
Simple Example
₹1,00,000 growing to ₹1,21,000 in 2 years is a CAGR of 10%.
Common Misconception
CAGR does not show the ups and downs along the way — actual yearly returns can vary widely.
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