Annual Rate of Return: Definition & Formula. The annual rate of return is a measure of an investment's gain or loss over the period of one year.

The compound annual growth rate (CAGR) measures an investment's annual growth rate over a period of time, assuming profits are reinvested at the end of each year.

When you're considering buying into an annuity, it's natural to wonder what kinds of returns they typically attain. The rate of return is an important factor in the growth of their portfolio and ...

The formula for the real rate of return is: (1 + nominal rate) ÷ (1 + inflation rate) - 1. To demonstrate the calculations, say you buy a stock for $100, and its value increases to $120 exactly ...

CAGR is the smoothed-out annual growth rate required for an asset to move from a starting value to an ending value. As an example, say you own a share of stock worth $50. Five years later, the ...

The rule of 70 can quickly tell you how long it would take for your investment to double. Find out how to get insight into your financial future.

The rule of 72 formula assumes an annual rate of compounding. This would mean that your earnings are only reinvested once per year, which is not the case with most investments.

For positive growth figures, using the compound annual growth rate highlights increases off a steadily larger base. To use a simplistic example, a $100,000 portfolio growing at a 10% CAGR after ...

The compound annual growth rate, or CAGR, measures the average annual return of an investment over a period of time. ... the CAGR formula would be as follows: CAGR = ($2,000 ÷ $1,000) ...

The compound annual growth rate of a metric over time is equal to the average annual increase (or decrease) in that figure, compounded each year. It’s the “compound” here that is key. Essentially, ...