John has invested 1,00,000 for 5 Years and want to achieve 2,00,000. So annual growth rate to achieve his goal can be calculated as below
- CAGR = ((FA/SA) 1/n-1) * 100
- FA (Final Amount) = 2,00,000
- SA (Starting Amount) = 1,00,000
- n (Period) = 5 Year
CAGR Calculation Steps
- CAGR = ((FA/SA) 1/n-1) * 100
- CAGR = ((2,00,000 / 1,00,000)1/5-1) * 100
- CAGR = (21/5-1) * 100
- CAGR = (1.1487-1) * 100
- CAGR = 0.1487 * 100
- CAGR = 14.87