Compound annual growth rate (CAGR) and internal rate of return (IRR) both measure investment performance but differ in ...

CAGR is a formula that calculates how the value ... Meanwhile, CAGR shows the average annual growth rate, factoring in ...

Formula for Compound Interest The compound interest formula is similar to the Compounded Annual Growth Rate (CAGR). For CAGR, you are computing a rate that links the return over a number of periods.

But that overstates the compound annual growth rate of the index, which has been just 6.2%. Compound annual growth is a more accurate indication of how much an investment will grow over time.