Enter Starting investment ($), Ending value ($) and Year 1 return (%) and the remaining scenario settings to review arithmetic average with this tool. An arithmetic mean describes the average listed percentage; it does not by itself reproduce growth in invested money.
Average return = Sum of periodic returns ÷ Number of periodsThe calculation links Starting investment ($), Ending value ($) and Year 1 return (%) to arithmetic average. An arithmetic mean describes the average listed percentage; it does not by itself reproduce growth in invested money. Losses and gains compound from different bases.
Enter Starting investment ($), Ending value ($) and Year 1 return (%) and the remaining scenario settings to review arithmetic average with this tool. An arithmetic mean describes the average listed percentage; it does not by itself reproduce growth in invested money.
Summarize a series of investment-period returns and compare an arithmetic average with the effect of compounding. Use equal-length periods for a meaningful comparison.
An arithmetic mean describes the average listed percentage; it does not by itself reproduce growth in invested money. Losses and gains compound from different bases.
Prepare Starting investment ($), Ending value ($), Year 1 return (%), Year 2 return (%), Year 3 return (%), Year 4 return (%) and Year 5 return (%). Enter returns for matching periods, preserve negative signs and compare the average with cumulative growth.
An arithmetic mean describes the average listed percentage; it does not by itself reproduce growth in invested money. Losses and gains compound from different bases. A simple return series does not describe deposits, withdrawals, fees or the timing needed for a money-weighted return.
Use the full settings in the worked-example table. They produce Arithmetic average: 10.00. Compare the method and units as well as the displayed number.
The displayed relationship is Average return = Sum of periodic returns ÷ Number of periods Enter returns for matching periods, preserve negative signs and compare the average with cumulative growth.
A simple return series does not describe deposits, withdrawals, fees or the timing needed for a money-weighted return. For a transaction or account decision, compare the inputs with the applicable statement, contract or official rules.
Worked average return calculator example. Set Starting investment ($) = 10000; Ending value ($) = 25000; Year 1 return (%) = 15; Year 2 return (%) = 8; Year 3 return (%) = -5; Year 4 return (%) = 12; Year 5 return (%) = 20. The corresponding output is Arithmetic average: 10.00. An arithmetic mean describes the average listed percentage; it does not by itself reproduce growth in invested money.
Summarize a series of investment-period returns and compare an arithmetic average with the effect of compounding. Use equal-length periods for a meaningful comparison.
Enter returns for matching periods, preserve negative signs and compare the average with cumulative growth.
| Field | Example value | Entry check |
|---|---|---|
| Starting investment ($) | 10000 | Use the amount for this scenario in the currency and period shown by the field. |
| Ending value ($) | 25000 | Use the amount for this scenario in the currency and period shown by the field. |
| Year 1 return (%) | 15 | Enter a percentage in the form requested by the field, keeping its stated time basis. |
| Year 2 return (%) | 8 | Enter a percentage in the form requested by the field, keeping its stated time basis. |
| Year 3 return (%) | -5 | Enter a percentage in the form requested by the field, keeping its stated time basis. |
| Year 4 return (%) | 12 | Enter a percentage in the form requested by the field, keeping its stated time basis. |
| Year 5 return (%) | 20 | Enter a percentage in the form requested by the field, keeping its stated time basis. |
Relationship used for this example: Average return = Sum of periodic returns ÷ Number of periods
An arithmetic mean describes the average listed percentage; it does not by itself reproduce growth in invested money. Losses and gains compound from different bases.
| Output | Displayed result |
|---|---|
| Arithmetic average | 10.00 |
With these settings, arithmetic average is 10.00. Use the same units and calculation mode when reproducing this example.
An arithmetic mean describes the average listed percentage; it does not by itself reproduce growth in invested money. Losses and gains compound from different bases. A simple return series does not describe deposits, withdrawals, fees or the timing needed for a money-weighted return.
Replace the illustrative starting investment ($) value (10000) with your own value, then complete the other inputs for the same scenario. Enter returns for matching periods, preserve negative signs and compare the average with cumulative growth.