average annual return

R

rathersurf

Does anyone know if there is a formula function like IRR (a,b) fo
average annual return if I have string of returns that are quarterly-
I have been calculating this in a manual formule but I was wondering i
there was a short cut formul
 
F

Fred Smith

Assuming you have a string of returns like:

2.7%, 3.4%, -1.2%, 5.8%, 1.4%, 0.6%

The total return is: =(1+a1)*(1+a2)*(1+a3)*(1+a4) *(1+a5)*(1+a6)-1

The result is 13%. In other words, a $1 investment grew to $1.13 over the time
period. Now use the Rate function to calculate the annual rate which would
generate this result:

=Rate(6/4,0,-1,1+b1)
 
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