Average Return Calculator

How it works

Choosing an average that matches the question

A gain of 50% followed by a loss of 50% has an arithmetic average of 0%, but 100 invested becomes 150 and then 75. The total loss is 25%; the geometric average is about −13.40% per period. Use equal-length periods for this comparison. If you added or withdrew money between dates, use the dated money-weighted mode instead: the timing and size of those cash flows affect your personal return.

Average return: formula and assumptions

Arithmetic mean = Σr/n. Geometric mean = [Π(1+r)]^(1/n)−1.

Each return must cover an equal-length period. Geometric return includes compounding.

Dated money-weighted return: formula and assumptions

Solve Σ cash flow / (1+r)^(elapsed days/365) = 0.

Payments by the investor are negative; receipts are positive. Actual dates account for unequal intervals. Multiple detected annual-return solutions are reported rather than choosing an arbitrary root.

Worked example

Using the Average return example:

Periodic returns (%)

10, -5, 15, 8

Arithmetic mean = Σr/n. Geometric mean = [Π(1+r)]^(1/n)−1.

Example result

These are illustrative inputs. Change the values to explore a different scenario.

Formula references

• Investor.gov: financial tools (opens in a new tab)

References explain the underlying methods; they do not imply endorsement or individual professional review of Finflo.

Common questions