CAGR
CAGR, or compound annual growth rate, is the constant yearly growth rate that would turn a beginning value into an ending value over a specified number of years.
Read CAGR definitionFinancial glossary
Clear definitions for the numbers you work with. Each term includes a practical example, a common misunderstanding and a calculator to explore it.
Saving & investing
Compound interest
Compound interest is interest calculated on both the original principal and interest already added to the balance.
Read Compound interest definitionDollar-cost averaging
Dollar-cost averaging means investing the same amount of money at regular intervals regardless of the current market price.
Read Dollar-cost averaging definitionExpense ratio
An expense ratio is a fund’s annual operating expenses expressed as a percentage of its average net assets.
Read Expense ratio definitionReal rate of return
Real rate of return measures how much an investment’s purchasing power changes after adjusting its nominal return for inflation over the same period.
Read Real rate of return definitionRetirement
401(k)
A 401(k) is a U.S. employer-sponsored retirement plan that lets eligible employees contribute part of their pay to a tax-advantaged retirement account.
Read 401(k) definitionLoans & debt
Amortization
Loan amortization is the repayment of a loan’s principal through scheduled payments over time, with interest calculated under the loan’s terms.
Read Amortization definitionBusiness & pricing
Markup vs. margin
Markup expresses gross profit as a percentage of cost, while gross profit margin expresses the same profit as a percentage of selling price.
Read Markup vs. margin definitionDefinitions explain concepts; the linked calculators show how assumptions affect results. Sources and the date of the definition and arithmetic check appear on each term page. Read our methodology and review status.