In the world of finance and investing, understanding the potential growth rate of an investment is crucial for making informed decisions. This is where the Compound Annual Growth Rate (CAGR) comes into play.
CAGR is a powerful tool to understand the performance of an investment over time. It is a measure of the annual growth rate of an investment, assuming that the investment has been compounding at a steady rate over a particular period.
CAGR is a useful metric for investors to evaluate the performance of their investments over the long term, as it provides a more accurate picture of the investment's growth than other measures such as average annual return.
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