CAGR - Compound Annual Growth Rate - Definition

The compound annual growth Rate is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered. The year-over-year growth rate of an investment over a given period of time. It is calculated by the formula:

CAGR=(Ending Value/Beginning Value)^(1/# of years)-1

The CAGR is not necessarily the actual rate of growth in a given year. It can be considered as a way to smooth out returns and can be used for investments in stocks, mutual funds, real estate and even forex trading.

Terms near "CAGR - Compound Annual Growth Rate"

Calendar effect
Calendar Spread
Calendar year
Call date
Call money market
Call money rate
Call option
Call protection
Call provision
Call ratio backspread
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