The Compound Annual Growth Rate (CAGR) is a statistical measure that represents the annual growth rate of an investment over a specified period of time. It is expressed as a percentage and is used to smooth out fluctuations in the annual growth rate over time. CAGR is calculated by dividing the value of an investment at the end of the period by its value at the beginning of the period, raised to the power of one divided by the number of years in the period, and then subtracting one. The formula for CAGR is:
CAGR = (End Value / Start Value)^(1/n) - 1
where "End Value" is the value of the investment at the end of the period, "Start Value" is the value of the investment at the beginning of the period, and "n" is the number of years in the period. The CAGR is a useful measure for comparing the performance of different investments over time and for projecting future growth rates.