CAGR (for Compound Annual Growth Rate) is the hypothetical constant interest rate that would be required for compound interest to turn a given present value into a given future value in a given amount of time. The CAGR formula is. where PV and FV are the present value and future value, and Y is number of years.
Positive and Negative externalities. An externality is defined as a benefit or cost that is imposed on a third party, such as society, other than the producer or consumer of a good or service, or, more simply, an economic side effect. The more of a product that is consumed or produced, the more of an externality that results.
There is an important conceptual distinction between a demerit good and a negative externality. A negative externality occurs when the consumption of a good has measurable negative consequences on others who do not consume the good themselves. Pollution (due, for example, to automobile use) is the canonical example of a negative externality.