The annual growth rate of 1 is 10%, the second year is 20%, and the third year is 15%.
Average growth rate = (10%+20%+15%)/3 =15%.
Compound growth rate = (151.8100) cubic-1= 14.9%.
The abbreviation of 1. compound growth rate is CAGR (compound annual growth rate). CAGR inequality.
The value of GR (growth rate) in real life. Its purpose is to describe the transformation of return on investment to a more stable return.
Expected return on investment.
The annual growth rate of investment in a specific period.
The calculation method is the n-th root of the percentage of the total growth rate, where n is equal to the number of years in the relevant period.
The formula is:
(current value/basic value) (1/ year)-1
For example, in June 2005, 5438+ 10/,the initial investment was 1 0,000 USD, but by June 2006, 65438+10/,the assets increased to.
65,438+03,000 USD, increased to 65,438+04,000 USD in 2007 and 65,438+0 USD in 2008.
According to the calculation formula, CAGR is the amount of the previous year (19500) divided by the amount of the first year.
(1 0,000), get 1.95, then take the power of1(2008-2005), that is, the square root of several years, and finally subtract1.
The power of 1/3 1.95 is 1.2493 and the formula is1.95 (1/3) =1.2493.
1.2493- 1=0.2493, which is 24.93%.
The final calculated CAGR is 24.93%, which means your three-year return on investment is 24.93%, calculated on an annual basis.
The calculated growth rate flattens out on the time axis. Of course, we can also see that the growth rate in the first year is 30% (13000-
10000)/ 10000* 100%
Second, the average annual growth rate is a concept related to statistics, also called compound growth rate. It is common in population forecasting, which means that it is flat for a certain number of years.
Annual growth rate. Formula: N-year data growth rate = (current period/previous N years) {1(n-1)}-1×100%.
The average annual growth rate under the root number of n times (last year/first year) =-1, and N= number of years-1. The calculation results can only be applied to the first year.
The year, if the intermediate year is calculated, is not equal to the original value.
That is, m =
. Where B is the last year and A is the first year. In fact, considering that B = A (1+m )n is a solution of m.
Cheng.
Current period/previous n years
It should be the end of this year/the end of the first n years, in which the end of the first n years refers to the end of the penultimate n year excluding this year, for example, counting.
Counting the four-year asset growth rate at the end of 2005, the calculation period should be 2005, 2004, 2003 and 2002, but at the end of the first four years.
It should be the end of 200 1. Parentheses calculate the comprehensive growth index of n years, not the growth rate.
^{ 1/(n- 1)}
It is the square root of the N-year total asset growth index in brackets, which is the exponential average. Because the values in brackets contain n years of fatigue.
Counting growth is equivalent to compound interest calculation, so square average should be done. It should be noted that the root sign should be n, not N-
1, unless the end of the first n years is changed to the beginning of the first n years. In short, the root number must be the same as the number of periods corresponding to the comprehensive growth index in brackets.
Match. How to define the formula can be understood by users.
[()^ 1/(n- 1)]- 1
1 is subtracted because the comprehensive growth index calculated in brackets contains 1 of the base period, which is the average annual growth index after prescription.
Still greater than 1, what we need is the average annual growth rate, that is, only the incremental part is examined, so the base period must be removed.
1, so subtract 1.