<p>Annualized return simply means average amount of money that a investment earns each year over a given amount of time.</p>

<p>If the compounding rates are the gains you've earned on your investment, The annualized return is:</p>

<p>$$AR = (1+totalreturn)^{\left({1\over{n}} \right)}-1$$ </p>

<p>This equation shows the return each year over a full span of time.  Total return is the total change in the variable over all periods.</p>

CC BY-SA 3.0
2018-03-05T07:48:52.967Z
Depends on whether OP wants to go from semi-annual or monthly returns to an annual return, or from a multiyear return to annual return.
ssn
CC BY-SA 4.0
2018-03-03T22:03:14.053Z
2018-06-07T14:12:24.480Z
2018-06-07T14:12:24.480Z
Senuri Bisheka Hettigoda
<p>I can do average return, I don't know what is annualized thou. can somebody say where (in a textbook hopefully) can I read about this? thanks!</p>

<econometrics>
how to calculate the average annualized return?
yasiren
# how to calculate the average annualized return?

(Asked by: username_0 on 2018-03-03)

I can do average return, I don't know what is annualized thou. can somebody say where (in a textbook hopefully) can I read about this? thanks!

**Tags:** econometrics

---

## 1 answers

### Answer by username_1 on 2018-03-03. Score: 1

Annualized return simply means average amount of money that a investment earns each year over a given amount of time.

If the compounding rates are the gains you've earned on your investment, The annualized return is:

$$AR = (1+totalreturn)^{\left({1\over{n}} \right)}-1$$

This equation shows the return each year over a full span of time. Total return is the total change in the variable over all periods.

> **Comments:**
> **username_2**: Depends on whether OP wants to go from semi-annual or monthly returns to an annual return, or from a multiyear return to annual return.  

---

