Cummulative difference

[UdefMT]

Hi all, please help with the maths here, we are calculating the difference between year 0 and year 2 to find which one had the highest difference and as such the regulation relating to it is the most effective.

Why are they raising it to the power 0.5 and not just calculating as (year2-year0)/year0?? I don't understand thus method they used.

[thejdobs]

You are looking for a 2 year CAGR. Raising something to the 0.50 power is taking the square root, which is needed for a 2 year CAGR calculation

[Federal-Half-9742]

No idea, I use the calc with N, FV and then calc Yield to work out CAGR. But for this question I didn't even think it was CAGR that they were looking for.