Definition: The compound annual growth rate (CAGR) is the rate at which an investment grows annually to reach a given end value. It's calculated by the following:[(Ending Value/Beginning Value)^(1/# of years)] -1
StockJargon Advice: CAGR is a great way to figure out the rate of return given only a couple details. For example, if I said I invested $1000 in 1990 and had $1700 in 2005, I can use this equation to figure out that that is a 3.6% CAGR.
CAGR's are commonly used in financial statement analysis.