# Annualized Return Calculator

Calculate total ROI, average ROI per period and CAGR with our Annualized Return Calculator. Get insights for informed investment decisions.

**Total ROI on 0 Years:**0%

**Average ROI by Year**0%

**Average CAGR by Year**0%

## Annualized Return Formula

The annualized return, often used in finance, calculates the average rate of return over a period, typically expressed as a percentage. The formula for annualized return (AR) is:

**AR = ((Ending Value / Beginning Value)^(1/n)) - 1**

**AR**: Annualized Return**Ending Value**: The value of the investment at the end of the period**Beginning Value**: The initial value of the investment at the start of the period**n**: Number of periods, typically years, but can be any interval (e.g., months, quarters)

## Annualized Return from Daily Returns

Our calculator also provides the capability to calculate annualized returns from daily returns. Follow these steps:

- Input the daily returns of your investment into the calculator.
- Choose the appropriate time period (e.g., number of days) for which you have the daily returns. Instead of Years.
- The calculator will then process the daily returns and provide you with the annualized return.

This feature allows you to analyze the performance of your investment over a daily timeframe and determine the annualized return.

## Annualized Return vs. CAGR (Compound Annual Growth Rate)

While both annualized return and CAGR are measures used to assess investment performance, they have distinct differences:

**Annualized Return:**Represents the average rate of return over a specific period, calculated as ((Ending Value / Beginning Value)^(1/n)) - 1, where 'n' is the number of periods (e.g., years).**CAGR (Compound Annual Growth Rate):**Represents the constant rate of return that would be required for an investment to grow from its initial value to its ending value, assuming the investment had been compounding at a steady rate annually over the specified period.

Key differences:

- Annualized return considers the actual return over a period, while CAGR assumes a steady growth rate.
- CAGR is useful for investments with varying returns over time, while annualized return is more suitable for investments with consistent returns.
- Annualized return can be calculated for any period, whereas CAGR is typically calculated for longer-term investments.

Both measures provide valuable insights into investment performance, but understanding their distinctions can help investors make more informed decisions.

- Struggling to Save? Try These 10 Money-Saving Hacks
- 13 Best Financial and Investment Calculators
- Mastering the Art of Frugal Living: A Comprehensive Guide to Smart Shopping
- A Comprehensive Collection of Investing and Financial Books
- The Ultimate List of Investing Podcasts
- Strategic Investing: Why You Should Look Beyond the Stock Market Celebrities
- The Harsh Truth About Dividend Investing
- Where to Buy Domains: Finding the Best Deals
- The AI Gold Rush: Navigating the Thin Line Between Innovation and Overvaluation in Business
- Sweet Dreams: 7 Smart Sleep Investments for a Restful Night.