Basic personal finance math

One thing that discourages most people from starting their personal finance journeys is that they get intimidated by all the numbers. That's a travesty because most of the math you need to know about personal finance is straightforward. In this video, Karthik, explains how to measure mutual fund returns and the time value of money. By the end of this video, you will be relieved that this isn't all that complicated and be a little more confident.
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[@prathapkrissh350]

The CAGR calculation formula is incorrect, please correct it to [(Ending value - Starting value)^(365/number of days)]-1. The values are swapped while subsitution in ending value and starting value for CAGR. For the stock B example in CAGR, which has a time period of 791 days, 364 days is substituted wrongly. Please consider correcting these in the video

[@varun0904]

I think you meant (Ending Value/starting value). Otherwise the units don't make sense.

[@ashokwadhwani996]

Correct CAGR formula is [Ending Value/Initial Value]^[365/No. of day] - 1

[@souravdutta8813]

It is still incorrect. The correct formula for CAGR is [{(Ending value/Starting value)^(No. of days/365)}-1]*100

[@bubblebath2892]

Brilliant video as explained something so complicated in such a simple way .Simple and to the point ....keep up the good work , Thanks a ton man

[@shashwatapal1297]

The CAGR formula shown in the video is incorrect @4:17, 1 should come outside the index, i.e. [(Ending value/Beginning value)^(365/ number of days)-1] . The CAGR will come to around 16.047%. Its just a small correction Also the starting and ending value are swapped in the formula. Consider rectifying in the video! Good initiative Zerodha Varsity

[@parag_]

Even the ending and starting value are swapped @4:11

[@abhipatil4844]

Thanks bud

[@DkRapperHotshot]

why no change in no. of days when they are invested for 2 different periods?

[@drajaykeshari623]

@@DkRapperHotshot again wrong values are put in formula....Rangappa is saying simple calculation and himself making blunder in calculation...need correction in video.

[@Rick_C137_op]

looks like they have't paid enough to video editor

[@kartikeydwivedi4774]

Got to know about CAGR today only.... Simple and best explanation 👌

[@kvinayagamoorthy]

The need to do complex math is RARELY the reason. We have strong biases. We still think Real estate and Gold are better avenues than the stock market and mutual funds. The land value of my house in Bangalore grew from 7 lakhs in 2004 to 90 lakhs in 2014. But it still stays the same in 2023. I cannot convince any of my relatives that real estate as an investment avenue is really bad for most of us. People only think of the boom period of real estate and think that is the best to grow wealth.

[@digvijaydiggi]

I thought the second video will come after 2024 general election,, thank you for your kind gesture 🙌

[@dhardibya2421]

That's a really great initiative towards financial education

[@leenasaikia1698]

Amazing videos… crisp and simple…keep sharing 👍🏽

[@amithathakur363]

Can't thank u enough for this effort, Karthik 🎉

[@User24762]

Great initiative Zerodha and Karthick sir.

[@Sadhvika248]

Excellent analysis sir 🙏🙏

[@nitishnagar3710]

I started investing since college from my pocket money and continued!😊

[@guruchillalg]

Good basic learning video sir, thanks a lot❤

[@kaushikkar25]

Fantastic learnings!! Thanks a ton

[@harsh5942]

CAGR Correct Formula CAGR=[(Ending Value/Beginning value)^(365/No of Days)]-1 and then multiply the result by 100 to convert it in percentage.

[@sagarraut7711]

this is gem

[@krishnakumars3324]

Thank you ❤

[@harshithm.rharshithmuddaka8289]

Thank you sir

[@ashoktalpada2191]

Thank you

[@viswanathanumapathy9216]

Good learning

[@sumittembhare4878]

Great Initiative ! Incorrect values CAGR formula in first example

[@subhajitpanja1353]

Super 👌🏻 👍🏻

[@silentwraith3464]

4:07 did you put the numbers in correctly? Ending value is on top and starting value at bottom?

[@darkmatter4768]

4:03 - 2nd portfolio has higher CAGR than first one - second one has CAGR of 20.061 while first one has CAGR of 16.04 percent

[@vishal-uy2nl]

Sir please increase ur frequency...😂☺️....keep that 1 week only.... please...☺️🤗....it is really useful to us...

[@uunistu8006]

How about a episode on saving tricks on personal finance..

[@Super.normalkid]

can we apply the future value of money (amount that bank is obliged to give ) to compare FD return in present value of money (amount I am putting in FD right now) and know the worth in today's value?

[@harshgupta9025]

What will be the discount rate while calculating present value of money?

[@guptasukrit]

How to calculate CAGR for that plant example?

[@CBS1611]

🤩🤩🤩

[@ashokwadhwani996]

Hi Karthik (Zerodha Varsity), I found some mistakes in CAGR formulas mentioned by you is [Ending Value/Initial Value]^[365/No. of day - 1] but correct CAGR formula = [Ending Value/Initial Value]^[365/No. of day] - 1. You have mentioned No. of daya in example of Investment A & B both 364 which is wrong. A is investment is for one year but B is more than 2 years. And also there is mistake in Present Value of Money formula: You have mentioned [Amount /(1+ Discount Rate)]^Time but correct formula = [Amount /(1+ Discount Rate)^Time].

[@sagarchauhan389]

Thanks Karthik sir your video is always great but i have a request, Could you start to create video on Risk management?

[@varsitybyzerodha]

Hey Sagar, we'll look into the possibilities, thanks.

[@MOHITJOSHI1991]

CAGR and Present value formulas are incorrect

[@pawansokhriya468]

No Its correct, in terms of days it is the one

[@elviesmascarenhas6059]

Currency devaluation is the biggest issue today, whether Yuan or Rupee or Dollar will make it who knows, mostly Yuan will make it....

[@bollarapuphanindra1264]

I have a doubt, while you explain the last example of money taking now and after 2 years you have calculated of 9 percent FD return but you need to consider inflation right

[@love-your-life_]

in CAGR starting and ending values are substituted incorrectly please calculate wisely

[@ranaadityapratapsingh867]

I think the CAGR formula that you calculated for fund B is wrong because you have considered the time to be 1 year rather 2 year and 3 months. Kindly recheck it

[@kadapallavineshnithinkumar2473]

taking money today makes a difference if there is an opportunity that gives more return than 9%

[@jagadeeshs3166]

@7:28 to find the present value using discount factor formula had mistake, the amount comes out of the bracket.

[@Vishalsharma-xj3ej]

I started at the age of 38 as i was paying home loan till age of 40.

[@kushalagarwal6706]

@ 4:06, number of days is not 364. it's 2 years 3 months

[@jenniferchen12345]

What does the ^ symbol mean?

[@GautamKumar-zn5vd]

Hi sir, how to calculate growth rate through XIRR, any formulae

[@varsitybyzerodha]

Hi Gautam, we've explained this here :) tradingqna.com/t/measuring-mutual-fund-returns-xirr-cagr/40617

[@JSATISHKUMAR]

Hi Sir is the ending value and the starting value exchanged in both the calculations can you please check the same

[@varsitybyzerodha]

Hi, this is because of a small typo.

[@Nitesh07779]

why did u put value of starting value in ending value

[@sridhaek99]

Ranga is 😊

[@pranjalibhagwat1978]

I started saving at 23

[@ContentCorner-ou5pl]

In CAGR calculation how can be your ending value be 50,000 and starting value 58,000??

[@rishabhsingh6757]

In present and future value of money we didn't count for inflation.

[@prasathkarupu3287]

Thanks karthik & team. Is it possible to be part of your team to make a financial literacy awareness to indians? I am looking for the opportunity.

[@varsitybyzerodha]

Hi Prasath, almost anything we do on the channel is an effort to contribute to financial literacy in India :) We'll continue doing this. If you have any specific ideas, do write to us on [e-mail].

[@nolanwarsiwarsi5028]

Sir please make a good video for SWP in coin app how can this plan

[@varsitybyzerodha]

Hi, we'll look into the possibilities, thanks.

[@abhijitkoni671]

The CAGR formula seems to be wrong and also 'no of days' considered for more than 2 years is still 364 days. It's very confusing. How can you say personal Finance is simple when gave wrong formula and wrong figures and making it complex? please correct it.

[@kulbhushanchhabra]

Starting at 36, 😢.

[@gorakhkalunge689]

your calculation is wrong for CAGR, please check the initial value and final value. Formula also.

[@riser9644]

1l is better because there is no tax as in FD 😉

[@darkmatter4768]

108 % calculation of CAGR did'nt get that part can someone explain 3:01

[@user-bh5rc9iw5r]

incorrect CAGR formula

[@taduriveeragoud8496]

Sir i have one dought that how u divided 365/364 for two years

[@bkmpatel7501]

+1

[@vanyabansalfun573]

At the age of 34 i inveter in mutual fund

[@user-bj3sr6ul8b]

Please always speak in hindi in videos because many people can't understand you, when the people will not understand you then the people will not invest in stocks by these calculations.😊

[@TulsaTulsa-eb8tu]

I started at the age of 32

[@snoftys9714]

Can you add subtitles, it would avoid using my headphones

[@varsitybyzerodha]

Hi, we'll look into this, thanks.

[@sohamdoshi2817]

got confused at 3.53 , they made a typo in the value explanation , cmon ! do better !

[@jayjoshifinance]

For (50000,58000) I am getting CAGR as 13.82% and for (50000,60000) number of days becomes 820 hence CAGR coming to 7.79%. Seems like ur video editor too tried learning while editing and inserted his own calculations😄.

[@varsitybyzerodha]

We'll look into this, Jay.

[@SanjuBaba-md8lx]

Hindi me video banaye sir 😫🙏🙏💓😫🙏🙏💓

[@navyanisha4562]

Each and every formula had got some mistakes. Make sure you don't confuse your viewers by showing wrong formulas. I had to watch other videos for clarification each time you guys show equations because I don't get the same answers as you got. The whole equations were so crap that even the calculator failed and showed error.

[@karankapadia3029]

wrong calculation shown in CAGR formula

[@varsitybyzerodha]

That is a typo, Karan. Thanks for pointing it out.

[@kumarsaket6877]

Please review the videos before posting. The "no. of days" substitution is wrong and Jan 2023 - Mar 2025 is not 364 days. If you publish such videos then you are propagating confusion instead of education.