Investment
CAGR
Also known as: Compound Annual Growth Rate, Annualized Return
Compound Annual Growth Rate - The mean annual growth rate assuming single investment and single withdrawal.
Detailed Explanation
CAGR (Compound Annual Growth Rate) measures the rate of return for an investment over a specified time period, assuming the profits were reinvested at the end of each year. It represents the smoothed annual return and is useful for comparing different investments. CAGR works best for lump sum investments but doesn't account for multiple cash flows timing like SIPs.