I would like to calculate the annualized rate of returns for investment accounts. I have yearly return %'s, but don't know how to get the annualized returns over a course of time (e.g., 3 years, 5 years, etc.)
I even have a check (the S&P) whose returns have been 26.46, 15.06, and 2.11 from 2009-2011, and the return rate for that period of time is 14.11. Anyone have an idea how that was calculated so I can incorporate it for my investment accounts?
The formula for Annualized Returns would be:
Annualized Return = [(1+R1)*(1+R2)...*(1+Rn)] ^ (1/n)
Where R = annual return for a given year and n is the number of years.
If solved kindly remember to mark Thread as solved.
Click the small star icon at the bottom left of my post if this was useful.
I know that the 3 year annualized total return at 12/31/2011 for the S&P was 14.11. When I enter 26.46, 15.06, and 2.11 (the S&P’s returns for 2009-2011 individually) I do not get 14.11. Am I doing something wrong?
From the values you gave the ATR should be c. 11.1% Is S&P making any adjustments to the calcs? Is there anything you can share with us?
I believe they are compounded returns. Does that change things?
Should not make a difference...
Using that formula, which is correct, I get 14.11%, which is what you (mikeyt354) say you are expecting. You must have typed something incorrectly.
I think you are not using percentages. I'm thinking this is a homework problem.
Last edited by Pauleyb; 10-11-2012 at 02:53 PM.
Pauley
--------
If I helped with your issue, I'd appreciate a rep bump (hit the '*' icon to the bottom left of this post).
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
LinkBack URL
About LinkBacks
Register To Reply
Bookmarks