Annualized Return Calculator
What Is Annualized Return?
An annualized total return is the geometric average amount of money an investment earns each year over a given period. The annualized return formula is calculated as a geometric average to show what an investor would earn over some time if the annual return were compounded.
An annualized total return provides only a snapshot of an investment's performance and does not give investors any indication of its volatility or price fluctuations.
Key Takeaways
- An annualized total return is the geometric average amount of money an investment earns each year over a given period.
- The annualized return formula shows what an investor would earn over a period of time if the annual return were compounded.
- Calculating the annualized rate of return needs only two variables: the returns (Initial Value - Ending Value) for a given period and the time the investment was held.
**Disclaimer:** This financial calculator is provided for illustrative purposes only. The calculations are based on assumptions and estimates, and actual results may vary. The calculator does not constitute financial advice and should not be solely relied upon for making financial decisions. Users are advised to consult with a financial advisor for personalized advice.
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