A compound return is where you reinvest the return so that also earns a return, ie it is an earning on earning. Now suppose you want to know that if you invest Rs 100 now and want Rs 200 in 5 years, what is the annual return that would be required, assuming you reinvested the earnings every year. This is the Compounded Annual Growth Rate, by which Rs 100 would have to grow each year to become Rs 200 in 5 years, ie by 15% pa.
Compounded Annual Growth Rate
