Use our free, simple **Cash App Annualized Return Calculator** to quickly determine the true annual rate of return on your Cash App investments, such as stocks or Bitcoin, regardless of how long you held them.
Cash App Annualized Return Calculator
Cash App Annualized Return Formula
Annualized Return ($$R_{annual}$$):
$$ R_{annual} = \left( \frac{\text{Final Value}}{\text{Initial Investment}} \right)^{\left( \frac{365}{\text{Days Held}} \right)} – 1 $$
Formula Source Links: Investopedia, Forbes Advisor
Variables
- Initial Investment: The total dollar amount originally invested in the asset (e.g., stock or Bitcoin) on Cash App.
- Final Value: The total dollar value of the investment when it was sold or at the end of the holding period.
- Days Held: The exact number of calendar days between the initial investment and the final valuation.
What is Cash App Annualized Return?
The Annualized Return is a geometric average that represents the amount of money earned on an investment over a year. It’s crucial for comparing the performance of different investments, especially those held for varying lengths of time. By annualizing the return, you can accurately assess how your Cash App stock or Bitcoin investments stack up against long-term benchmarks, regardless of whether you held them for 60 days or 500 days.
For Cash App users who frequently buy and sell fractional shares or crypto, the annualized return provides a standardized metric. It smooths out short-term volatility and allows you to understand the sustained, yearly growth rate your capital experienced. This is far more informative than a simple total return, which doesn’t factor in time.
How to Calculate Annualized Return (Example)
- Determine the Simple Return: Divide the Final Value ($1,250) by the Initial Investment ($1,000) to get 1.25.
- Calculate the Time Factor: Divide 365 days by the Days Held (180 days) to get approximately 2.0277.
- Apply the Time Factor: Raise the Simple Return (1.25) to the power of the Time Factor (2.0277). $$1.25^{2.0277} \approx 1.5796$$.
- Subtract One: Subtract 1 from the result to get the Annualized Return (0.5796).
- Convert to Percentage: Multiply by 100. The Annualized Return is 57.96%.
Related Calculators
- Total Investment Return Calculator
- Compound Annual Growth Rate (CAGR) Tool
- Time Value of Money Calculator
- Simple Interest Yield Calculator
Frequently Asked Questions (FAQ)
No. CAGR (Compound Annual Growth Rate) is the annualized return assuming the investment was held for multiple years and typically uses end-of-year figures. Annualized return can be calculated for any holding period.
Annualizing a return allows you to compare it apples-to-apples with investments that lasted a full year or more. A 10% return over 6 months is vastly different from a 10% return over 2 years, and annualization provides clarity.
The formula requires a non-zero Initial Investment as it involves division. If the initial investment was truly zero, the return is technically infinite, and this calculator cannot be used.
A “good” return depends on risk. Historically, the S&P 500 averages around 10% before inflation. Anything significantly above that typically suggests higher risk.