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Difinition of Compound Annual Growth Rate (CAGR)

Definition: What is CAGR?

CAGR stands for Compound annual growth rate. it is the financial investment calculation. It measures the percentage investment increase or decreases over the year.

Definition of Compound Annual Growth Rate (CAGR)

For an investment over a period of time CAGR is an average rate of return. The annual return of most of the investment varies from year to year.

CAGR calculation averages the good year and bad year return into 1 percentage return which can be used by the investors and management for the future financial investment.

Compound CAGR is not the actual annual rate of return. Compound CAGR is an average of all the annual return invest has produced.

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