Average Annual Growth Rate

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Average Annual Growth Rate

The average growth of an investment over a given number of years. It is calculated simply by adding together the growth rate in each year in question and dividing by the number of years. For example, if a portfolio grows 10% in year 1, -5% in year 2, and 6% in year 3, the average annual growth rate is calculated as (10 - 5 + 6) / 3 = 3.67%.
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