annualized a return on an investment

[Av8tordude]

I can seem to wrap my head around on how to put a formula together. Could someone provide assistance with a formula.

Thank you kindly.


"How do I annualized a return on an investment that has cash added or subtracted during the year?"


(1) Total the beginning Account Balance and any additions during the year to learn Total Investments.


(2) Add any withdrawals during the year to the Ending Account Balance.


(3) Subtract the sum of Step 1 from the sum of Step 2 to get total return.


(4) Divide total return by the sum of Step 1 to get the rate of return within the year.

 

[footoo]

Have a look at the XIRR function.