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Compound Annual Growth Rate

The compound annual growth rate (CAGR), also known as the cumulative annual growth rate, is a statistic used to express trends in expenditures, revenues, or other data over time by providing the annualized rate of change between the base year amount and the final year amount. More specifically, the CAGR is the annual percentage change that when applied to the base year amount and compounded over the number of years between the base year and the final year yields the final year amount. This entry discusses how the CAGR is used in education and how it is calculated.

In education finance, the CAGR is expressed in statements such as the following:

In other words, $10.3 billion compounded at the rate of 2.15% over 6 years yields $11.7 ...

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