Investing
Annualised return
The constant annual rate that produces the same end value.
The Formula
Annualised = (final / initial)^(1/years) - 1
The constant annual rate that produces the same end value.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| t | Years | count | Holding period in years. |
What Each Symbol Means
tcount
Years
Holding period in years.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate investment return page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Investment Return, filed under Finance. Every number the guide produces comes from substituting into this one line.