Annualized and real return
Earning 20% over three years is not the same as earning 20% a year. Work out the compound annual return of your investment to compare it with others and, if you like, take out inflation.
Compound annual return
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Total return
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Gain
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Simple annual average
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Real annual return
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How it is calculated
- Total return = ending value ÷ starting value − 1.
- Compound annual return = (ending value ÷ starting value) ^ (1 ÷ years) − 1.
- Real return = (1 + annual return) ÷ (1 + average inflation) − 1.
Assumptions
- No contributions or withdrawals during the period: if there were any, the result is not comparable.
- Values after fees; before taxes unless you take them out yourself.
- You enter the inflation rate: use your country's official figure for the same period.