Calculate your investment performance over time with our professional-grade statistics calculator app. This tool helps you determine the Annualized Return (CAGR), investment growth, or the time required to reach your financial goals by solving for any missing variable in the annualized return formula.
Statistics Calculator App
Enter any 3 variables to calculate the 4th. Leave the field you want to solve for blank.
Statistics Calculator App Formula
The core formula for annualized return is:
$$R = \left(\frac{V_f}{V_i}\right)^{\frac{1}{t}} – 1$$
Source: Investopedia – Annualized Return
Variables Used:
- $V_i$ (Initial Investment): The starting amount of capital.
- $V_f$ (Ending Value): The total value at the end of the period.
- $t$ (Years): The total time duration expressed in years.
- $R$ (Annualized Return): The geometric mean return per year.
What is a Statistics Calculator App?
A statistics calculator app for annualized returns is an essential tool for investors to compare the performance of different assets over varying timeframes. Unlike simple returns, annualized returns account for the effect of compounding, providing a standardized “per year” figure.
By using this calculator, you can eliminate the complexity of manual exponents and logarithms, ensuring your financial planning is based on mathematically accurate CAGR (Compound Annual Growth Rate) data.
How to Calculate Statistics Calculator App (Example)
- Identify your Initial Investment ($V_i$), for example, $5,000.
- Check the Ending Value ($V_f$) of the portfolio, e.g., $8,500.
- Determine the Time ($t$) in years, such as 4 years.
- Divide $V_f$ by $V_i$: $8,500 / 5,000 = 1.7$.
- Raise the result to the power of $(1/t)$: $1.7^{0.25} \approx 1.1418$.
- Subtract 1 to get the rate: $1.1418 – 1 = 0.1418$ or 14.18%.
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Frequently Asked Questions (FAQ)
What is the difference between simple return and annualized return?
Simple return only measures the total gain or loss, whereas annualized return provides the yearly rate, making it easier to compare investments held for different lengths of time.
Can the return rate be negative?
Yes, if the Ending Value is less than the Initial Investment, the statistics calculator app will yield a negative percentage, indicating a loss.
Is CAGR the same as Annualized Return?
In most investment contexts, CAGR (Compound Annual Growth Rate) and Annualized Return are used interchangeably to describe the smoothed annual growth rate.
Why do I need 3 variables?
The formula has four variables ($V_i, V_f, t, R$). To solve for any one of them using algebra, the other three must be known values.