1. What is Monthly CAGR?

The Monthly Compound Annual Growth Rate (CAGR) measures the mean annual growth rate of an investment over a specified time period of less than or equal to one year, expressed in monthly terms. It provides a smoothed annualized return figure.

2. How Does the Calculator Work?

The calculator uses the Monthly CAGR formula:

Where:

• \( End \) — Ending value of investment
• \( Start \) — Starting value of investment
• \( Months \) — Time period in months

Explanation: The formula annualizes the growth rate by raising the total return ratio to the power of (12/months) and subtracting 1.

3. Importance of CAGR Calculation

Details: Monthly CAGR is particularly useful for comparing short-term investment performance, evaluating business growth metrics, and projecting future values based on recent trends.

4. Using the Calculator

Tips: Enter the starting value, ending value, and time period in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is monthly CAGR different from annual CAGR?
A: Monthly CAGR annualizes growth over periods shorter than one year, while annual CAGR measures actual yearly growth over multiple years.

Q2: What are typical CAGR values?
A: For investments, 7-10% is good for stocks, 2-5% for bonds. Business metrics vary widely by industry.

Q3: When is monthly CAGR most useful?
A: When analyzing performance over periods less than one year, or when comparing investments with different time horizons.

Q4: What are limitations of CAGR?
A: CAGR assumes smooth growth and doesn't reflect volatility or interim losses. It's an average, not actual year-by-year performance.

Q5: Can CAGR be negative?
A: Yes, negative CAGR indicates the investment lost value over the period.