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Compound tariff |
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Compound tariffA tariff that combines both a specific and an ad valorem component.Similar MatchesSimple compound growth methodSimple compound growth methodCalculating a growth rate by relating terminal value to initial value and assuming a constant percentage annual rate of growth between the two values. Compounding frequencyCompounding frequencyThe number of compounding periods in a year. For example, quarterly compounding has a compounding frequency of 4. Compound Annual Growth RateCompound Annual Growth RateBest defined by example. If you invest $100 today and make 5% in the first year and reinvest ($105) and make 8% in the second year, the compound annual growth rate is 6.489%. The calculation is $100x1.05x1.08=$113.4 which is what you end up with at the end of year two. The average return is [square root(113.4/100) -1]= 0.06489 or 6.489%. Note 1. If we had three compounding periods we would take the cubic root (power of 1/3). Note 2. If we had invested at exactly 6.489 in both periods, we get $100x1.06489x1.06489=$113.4. Note 3. The example is directed to a return - but CAGR could be applied to earnings growth, GDP growth, etc. Compound growth rateCompound growth rateSee: Compound Annual Growth Rate Compound interestCompound interestThe interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan. Further Suggestionscompound interestCompounding period Compound option compound reversionary bonus Discrete compounding Realized compound yield Continuous compounding compound annual growth rate Compound interest Compounding Compound Annual Return |
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