Accurate estimation of the return on investment is important to an investor. It not only gives him a clear picture of how his investments have fared, but also enables him to compare the returns of fundamentally different investment options available in the market.  The EAR and CAGR are two of the most important concepts/calculators, which cover the investments with a fixed rate of return and those which do not grow at a constant rate and fluctuate widely over the holding period.

Effective annual rate (EAR) Continue reading →