Meanwhile, CAGR shows the average annual growth rate, factoring in compound growth. For example, simple growth rate might show that a business grew revenue by 100% over five years, from $100 ...

Image source: Getty Images. CAGR is the smoothed-out annual growth rate required for an asset to move from a starting value to an ending value. As an example, say you own a share of stock worth $50.

Online tools, including CAGR calculators, will spit out the CAGR when entering these three values. An example of a CAGR calculation follows. In the above case, the CAGR is 21.7%. The CAGR is ...