What is CAGR (Compound Annual Growth Rate)?

Posted in Glossary by Johns Wu
January 15, 2006 12:28 AM - 1 Comments

CAGR

Also known as the compound annual growth rate. CAGR is the year to year growth rate of an investment over a period of time. This rate is taken by getting the nth root of the total percentage growth when n is the number of years measured. CAGR describes the return given a fixed rate throughout the period. Since interest rates are variable, CAGR is a representative number of the potential of your investment.