My dear Investor Friends, 09-08-2022
Conversion of Return from Percentage of CAGR to Amount of Money and vice-versa (Amount to percentage of CAGR)
In today’s Knowledge Enhancement Series, we would talk about how much amount would return from a certain percentage of CAGR? (Compounded Annual Growth Rate).
Especially for the followers and clients of Anand Wealth Consultants.
Return:
We invest money on the basis of return we expect to receive. But it becomes difficult to know exactly how much amount would we receive at a certain percentage if the investment period is for longer years.
For a long-term investment, finding out CAGR is the only correct method. Not the simple rate.
Example: we need to add given percentage to the principal amount for the first year of investment and this amount becomes the base amount/principal for the next year. Similarly,we need to add the given percentage to this base amountwhich again becomes the base amount for the next year.
E.g. if someone asks you how much would 10 lakhs (1 Million) at 15% p.a. return in 10 years? Then the answer isn’t easy. In a hurry to find its solution, we can’t calculate as follows:
(i) 10 (yrs.) x 15% = 150%
(ii)150%of 10 lakhs = Rs.15 lakhs
(iii) Rs.15 lakhs+ Rs. 10 lakhs (principal amount)
(iv) Therefore, the total amount we get is Rs. 25 lakhs. (2.5 Million At the end of 10 Years)!
No. ❌❌Not at all❌❌
Want to know how much? Read further…
Or if someone informs you, he got 35 lakhs (3.5 m.) out of investing only 10 lakhs within 9 years,
you may start doingmental calculation to derive its return per year, but can’t get it. So, what to do?
Relax. To relieve you from all such problems we are providing you a Ready Reckoner (Table) that will keep giving you instant idea of CAGR or Amount – whatever you are looking for.
Thanking You
Amish Saraiya
Anand Wealth Consultants
Multipliers of Your Wealth
Website: www.anandwealth.in
