How to Calculate Annualized Return
Annualized rate of return for investments with dated cash flows.
The Formula
Annualized return from cash flowsThe annualized return formula uses the mathematical relationship: Annualized return from cash flows. Each variable in the formula represents a measurable quantity that affects the final result.
Step-by-Step Method
- 1Identify all input values needed for the annualized return calculation.
- 2Substitute your known values into the formula: Annualized return from cash flows.
- 3Perform the arithmetic operations in the correct order (PEMDAS/BODMAS).
- 4Check that your result has the correct units and is within a reasonable range.
- 5Verify using the interactive Annualized Return Calculator to confirm your answer.
Related Topics
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Use the Interactive Calculator
Skip the manual math — get instant results with our free Annualized Return calculator.