annualized return on an investment.

  • Thread starter Thread starter CM
  • Start date Start date
C

CM

Hi All,

Can anyone tell me with the function to calculate the annualized return on a
stock market investment.

Info supplied is:

Date of purchase
Purchase price
Quantity purchased
Dividends received
Current value
Current date

I am using the function =(J8-G8)/G8*100 to give simple return and this seems
correct.

Now I want to calculate annual return.

Thanks much,

CM
 
Hi CM!

I'd be inclined to use XIRR for this exercise:

Description:
XIRR returns the annual effective interest rate for a schedule of cash
flows received at specified dates
Syntax:
=XIRR(values,dates,guess)
Arguments:
Values:
'An array or a reference to cells that contain numbers for which you
want to calculate the internal rate of return. Values must contain at
least one positive value and one negative value to calculate the
internal rate of return. If an array or reference argument contains
text, logical values, or empty cells, those values are ignored.
Dates:
A schedule of payment dates that corresponds to the cash flow
payments. The first payment date indicates the beginning of the
schedule of payments. All other dates must be later than this date,
but they may occur in any order
Guess:
A number that you guess is close to the result of XIRR

The function is ideal for calculating the return from irregular series
of incomes from a "simple" investment with a single outflow followed
by a series of returns.

--
Regards
Norman Harker MVP (Excel)
Sydney, Australia
(e-mail address removed)
Excel and Word Function Lists (Classifications, Syntax and Arguments)
available free to good homes.
 
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