What is compound annual growth rate?
CAGR, the constant annual rate that compounds a beginning value to an ending value over n periods: (Ending ÷ Beginning)^(1/n) − 1. From Year 1 to Year 5 there are four periods, not five.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.