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Compound annual growth rate (CAGR)

The steady yearly rate that turns a starting value into an ending value.

$
$
yrs

CAGR

12.47%

Total growth
80.00%
Multiple
1.80×

The formula

CAGR = (Ending ÷ Starting)^(1 ÷ n) − 1

CAGR smooths out the ups and downs into one yearly rate. It hides volatility, so two investments with the same CAGR can have very different paths.

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