compound growth rate


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Related to compound growth rate: CAGR

Compound growth rate

Compound Annual Return

The average year-on-year growth rate of an investment over a number of years. While investments usually do not grow at a constant rate, the compound annual return smoothes out returns by assuming constant growth. This makes accounting for the investment tidier. It is calculated as:

Compound annual return = (Ending Value / Beginning Value)^((1 / n) - 1) where n is the length of time of the investment in years. It is also called the compound annual growth rate. See also: Average Annual Growth Rate.

compound growth rate

The percentage rate, generally stated on an annual basis, at which a variable grows adjusted for compounding. For example, a 7% compound growth rate for ten years results in $100 growing to slightly less than $200. Without compounding, the $100 would earn $7 per year and grow to only $170. Financial analysts frequently use historical and projected compound growth rates in analyzing earnings, sales, and dividends.
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7021.397 lacs for the entire study period, registering a compound growth rate of 1.80 percent per annum.
Cargill is now a $75 billion company with more than 140,000 employees in more than 60 countries, with a 12 percent compound growth rate over the last 50 years.
Nespresso reported a growth of 36.5% for 2005, which is above Nestle Nespresso's sustained annual compound growth rate of more than 30% during the last five years.
Demand for platinum in the automotive sector has risen dramatically in recent years, reporting an estimated 14 percent compound growth rate over the past five-year period, far outstripping an approximate 4 percent expansion in new mine supplies.
In consequence, "our compound growth rate is 20 percent per annum.
SIA also predicts that by 2008, sales for the semiconductor industry should reach $309 billion with an annual compound growth rate of 9.8%.
Austin, TX -- Flip chip and wafer level packaging will see a compound growth rate of 28% between 2004 and 2009, a new study projects.
Mr McKeon said the rate of growth was sustainable, pointing to an average compound growth rate of 27 per cent in the UK over recent years.
By 2007, the annual compound growth rate for customized software will be roughly double that of standard packages (see chart).
This means that one out of every five Europeans bank online yet that figure is expected to rise to a total of 130m by 2007 - an annual compound growth rate of 21% for the next five years.
However, the fastest growing market will be for application development and deployment software, which will have an annual compound growth rate of 11.5%.
wine consumption climbed to 233.7 million 9-liter cases in 2001, though the 0.8% increase was relatively weak compared with the 3.6% annual compound growth rate of the prior seven years.