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CAGR

Compound annual growth rate of an investment.

Formula

CAGR=(VfVi)1/n−1CAGR = \left(\frac{V_f}{V_i}\right)^{1/n} - 1

Variables

V_fFinal value
V_iInitial value
nYears

Example

Growing from $100 to $200 in 3 years is a CAGR of 2^(1/3) − 1 ≈ 26%.

Did You Know?

CAGR smooths a bumpy investment into a single steady annual growth rate for easy comparison.

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