A reverse CAGR calculator is used to estimate the final value of an investment, based on
- Starting value &
- Compounded return you’ve been promised – or, are expecting; &
- Number of years you plan to let the investment grow
Reverse CAGR Calculator
Click to expand
If you already know the final value and would like to know the CAGR you’ve received from the investment, you can use this CAGR CALCULATOR.
The Rule of 72
There’s a straightforward connection between the Reverse CAGR calculator and the rule of 72.
If you know the expected CAGR of an investment product, you can easily know how long the investment would take to double in value.
For example,
- If the CAGR of a mutual fund is say 18%, dividing 72 by this number gives 4. So your investment in that mutual fund will double in value in 4 years.
- If an FD you are planning to book is promising a 6% return, dividing 72 by this number gives you 12. Which means your investment in that FD will double in value in 12 years.
Other types of returns like Absolute, Annual, Average are discussed in detail in the book in Chapter 8, under section ‘Simple Useful Math‘.
Happy Moneyplanting.
Vinod
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