# how to calculate the average annualized return?

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!

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.

• 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 Mar 5 '18 at 7:48