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CAGR - Compound Annual Growth Rate
Compound Annual Growth Rate (CAGR) is a financial metric that measures the mean annual growth rate of an investment over a specified period, assuming the investment grows at a steady rate. CAGR provides a smoothed rate of return, allowing investors to compare different investment opportunities. It is calculated using the formula \((\text{Ending Value}/\text{Beginning Value})^{(1/n)} - 1\), where \(n\) is the number of years. CAGR is useful for understanding long-term growth trends.