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Finance Dictionary

CAGR

Compound Annual Growth Rate — the steady annual growth rate an investment would need to grow from its beginning value to its ending value over a given time period, assuming profits are reinvested.

Formula

CAGR = (End Value / Start Value)^(1/Years) − 1

Example

₹1 lakh growing to ₹2.59 lakh in 10 years = CAGR of 10%.