Question 1

What is CAGR and why use it?

Accepted Answer

CAGR is the constant yearly rate that would take your starting value to your ending value over the period, as if it grew smoothly. It lets you compare investments of different lengths on one axis — a 300% gain over five years and a 100% gain over one year are very different annual rates.

Question 2

What does CAGR not tell you?

Accepted Answer

It ignores the path. A 40% CAGR could be a steady climb or a 90% crash followed by a huge recovery — the endpoints are identical. It also assumes reinvestment and says nothing about volatility or drawdown, so always read it alongside a risk measure, not on its own.

Calculadora CAGR (taxa composta de crescimento anual)

Um número para a volta, outro para a viagem