HOUSEKEEPING
Website offers tips on car financing
If you are in the market for a new or used car and plan to finance the purchase, you will want to examine your finances before applying in order to make sure you get the best terms. One way to make sure you are reviewing the right things is to go through the “tuneup” at .
The website, put together by Americans Well-Informed on Automobile Retailing Economics, or AWARE, helps consumers understand the right steps to take in order to get the best car-financing deals. The tuneup is a four-question quiz that covers the basics in a matter of minutes.
SHORT COURSE
Compound annual growth rate
Compound annual growth rate, a term that became popular in the late 1990s when growth-oriented investments were driving the stock-market boom, is simply the year-over-year rate of increase in an investment or in a financial statistic (such as net sales for a stock).
To calculate CAGR, you start with the total growth over the entire period being examined, then figure out what one number, if used as the return each year, would have gotten you to that point.
With that in mind, if a $10,000 investment grows to $15,000 over two years – a 50 percent total increase – the compound annual growth rate would be roughly 22.5 percent. In that way, the $10,000 grows to $12,250 the first year, and then to $15,006 the second. Analysts look at CAGR over five or more years to examine long-term trends for a stock.
