What is CAGR in trading & investing?

Trading And Investing For Traders And Investors What is CAGR? CAGR is an abbreviation of Compound Annual Growth Rate, and is a common measure of growth that is used to measure the returns on investments over several time periods on an annual basis.

What is the CAGR formula?

The CAGR formula provides a growth rate in the form of a percentage. You might use this formula to project the CAGR needed to achieve your investment goals or measure the return on existing investments.

What is compound annual growth rate (CAGR)?

What Is the Compound Annual Growth Rate (CAGR)? The compound annual growth rate (CAGR) is the rate of return (RoR) that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each period of the investment’s life span.

Why is CAGR a better measure of growth?

Using the Investing Answers CAGR calculator, the total was 37.97%. This makes the CAGR a better measure of growth because it accounts for the 5 years of ups and downs. Because CAGR measures returns for any time period, you can make equal comparisons of one investment's return to another investment's return.