Target Exam

CUET

Subject

-- Applied Mathematics - Section B2

Chapter

Financial Mathematics

Question:

If CAGR stands for Compound Annual Growth Rate, F.V stands for final value of an investment, P.V stands for present value of an investment and n is the number of years then

Options:

$CAGR =(\frac{F.V}{P.V})^{\frac{1}{n}}-1$

$CAGR =(\frac{P.V}{F.V})^{\frac{1}{n}}-1$

$CAGR =(\frac{F.V}{P.V})^{n}-1$

$CAGR =(\frac{P.V}{F.V})^{n}-1$

Correct Answer:

$CAGR =(\frac{F.V}{P.V})^{\frac{1}{n}}-1$

Explanation:

The correct answer is Option (1) → $CAGR =(\frac{F.V}{P.V})^{\frac{1}{n}}-1$ **

The correct CAGR formula is:

$\displaystyle CAGR=\left(\frac{F.V}{P.V}\right)^{\frac{1}{n}} - 1$