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3. Compound Annual Growth Rate (CAGR)
The compound annual growth rate (CAGR) is a formula that calculates the annual growth rate of an investment using the compounding effect.
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Performance Measures in Investment Management
Compound Annual Growth Rate (CAGR) : CAGR tracks the average annual growth, of your investments, over the defined period. It displays the average rate of return on your investments over a year. CAGR is helpful because it accurately measures growth (or degrowth) over time.