
Compound Annual Growth RateCompound Annual Growth Rate  CAGR (source http://www.investopedia.com/terms/c/cagr.asp) The year over year growth rate of an investment over a specified period of time. Calculated by taking the nth root of the total percentage growth rate where n is the number of years in the period being considered. This can be written as: (Current Value/Base Value)^(1/# of years)  1. CAGR doesn't represent reality. It's an imaginary number that describes the rate at which an investment grew as though it had grown at a steady rate. 