CAGRvery hardFree question
Revenue grew from £250m to £488m over 3 years. What was the CAGR?
A95.2%
B18.2%
C39.7%
D25.0%
E31.7%
Worked solution
CAGR = (ending ÷ beginning)^(1/years) − 1 — annualised, not the simple average of total growth. The correct answer is 25.0%. Traps to avoid: 95.2% comes from the "total not annualised" error; 18.2% comes from the "n off" error; 39.7% comes from the "wrong periods" error; 31.7% comes from the "simple average" error.
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