CUET Preparation Today
For which one of the following purposes is CAGR (Compounded Annual Growth Rate) not used? |
To calculate and communicate the average growth of a single investment To understand and analyse the donations received by a non-government organisation To demonstrate and compare the performance of investment advisors To compare the historical returns of stocks with a savings account |
To understand and analyse the donations received by a non-government organisation |
The correct answer is Option (2) → To understand and analyse the donations received by a non-government organisation CAGR is used to measure and compare growth rates of investments over time. It is suitable for: • calculating average growth of an investment • comparing performance of investment advisors • comparing returns of stocks with savings accounts It is NOT used to analyse donations received by a non-government organisation, since donations do not represent compounded investment growth. final answer: To understand and analyse the donations received by a non-government organisation |
