Thursday, January 16, 2014
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What is CAGR?
Commonly called CAGR, it is the year-over-year growth rate of an initial amount of money or a number. CAGR is mostly used in finance to measure the yearly growth of investments or in economy the growth of GDP and other measurables.
For example, if Rs 100 becomes Rs 115 at the end of the first year and Rs 121 at the end of the second year, the CAGR is actually 10%. Often it is criticized as an imaginary number since it gives an idea as if the growth was steady over the number of years under consideration.
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