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CAGR, or Compound Annual Growth Rate, is a financial metric used to measure the mean annual growth rate of an investment over a specified period of time, assuming the profits are reinvested each year. The CAGR definition helps investors assess how consistently their investments grow over time, especially in cases where growth rates may fluctuate from year to year. The formula for calculating CAGR is: C A G R = ( Ending Value Beginning Value ) 1 Number of Years − 1 CAGR = \left( \frac{{\text{Ending Value}}}{{\text{Beginning Value}}} \right)^{\frac{1}{\text{Number of Years}}} - 1 C A GR = ( Beginning Value Ending Value ​ ) Number of Years 1 ​ − 1 This method smoothens out the volatility of returns, offering a clear picture of an asset's performance over time. For example, if an investment grows from $10,000 to $20,000 over five years, the CAGR would reflect the steady annual growth rate that would lead to this outcome. CAGR is widely used for compa...

  CAGR is a useful measure of growth over multiple time periods. It represents one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time. It is especially useful for comparing the growth rates of different investments or business metrics over time. Definition: CAGR is the mean annual growth rate of an investment over a specified period of time longer than one year. It represents one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time. Formula: The formula for CAGR is: CAGR = ( Ending Value Beginning Value ) 1 n − 1 \text{CAGR} = \left( \frac{\text{Ending Value}}{\text{Beginning Value}} \right)^{\frac{1}{n}} - 1 CAGR = ( Beginning Value Ending Value ​ ) n 1 ​ − 1 Where: Ending Value is the value of the investment at the end of the period. Beginning Value is the value of the investment at the start of the period. n is the number of years. ...