Interest & Returns Calculators

How CAGR Is Calculated

CAGR (Compound Annual Growth Rate) is the constant annual rate that would take an investment from its initial value to its final value over the holding period — found by taking the ratio of final to initial value to the power of 1 divided by the number of years.

How the Future Value of a Lumpsum Investment Is Calculated

A lumpsum's future value is its present value multiplied by (1 + rate)^years — the same compound-growth formula behind compound interest, applied here to any investment with an expected annual rate of return.

How the Present Value of a Future Amount Is Calculated

A future amount's present value is that amount divided by (1 + discount rate)^years — the exact reverse of compounding, showing what a future sum is actually worth in today's money.

Three Different Ways to Decide How Much to Save

"How much should I save?" has at least three different answers depending on which question you're actually asking — what am I saving right now, what does a general rule of thumb suggest, or what does a specific future goal actually require.

Why Average Return and CAGR Can Tell Very Different Stories

A +50% year followed by a -50% year averages to exactly 0%, but actually leaves an investment down 25% overall — a 13.4% annualized loss that the simple average return completely hides.