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From Investopedia: “The compound annual growth rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer than one year.”

“The compound annual growth rate isn’t a true return rate, but rather a representational figure. It is essentially an imaginary number that describes the rate at which an investment would have grown if it had grown at a steady rate, which virtually never happens in reality. You can think of CAGR as a way to smooth out an investment’s returns so that they may be more easily understood.”

Reference: Investopedia