Cannot understand the 10 year VTI growth chart on Vanguard
The image below shows the performance of Vanguard Total Stock Market ETF (NYSE Arca: VTI). I cannot understand how ,000 becomes ,070 after 10 years with a 10-year return of 12.80%.
Shouldn't it be ,000 * 1.128 = ,280 ?
Is some kind of compounding happening here? What's the equation?
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I cannot understand how ,000 becomes ,070 after 10 years with a 10-year return of 12.80%.
12.80% is the compound annual growth rate (CAGR). It is 12.80% every year for 10 years.
Shouldn't it be ,000 * 1.128 = ,280 ?
No. It should be
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