Complete guide
Average Return Calculator: formula, worked example and interpretation
Calculate arithmetic mean return, compounded geometric return and cumulative growth from periodic returns. Enter the known values and the result updates instantly with an auditable breakdown.
What the Average Return Calculator answers
Calculate arithmetic mean return, compounded geometric return and cumulative growth from periodic returns.
Use the breakdown to compare the result with the source values before making a decision.
Formula and variables
The calculation uses arithmetic mean=Σr/n; geometric mean=(Π(1+r))^(1/n)−1. Every variable comes directly from a labeled field.
arithmetic mean=Σr/n; geometric mean=(Π(1+r))^(1/n)−1Worked example
Returns of 10%, −5%, 12% and 8% are compared using both averaging conventions.
Changing any field recalculates the result immediately, so nearby scenarios can be compared without reloading the page.
How to use the result
Treat the result as a planning value and compare it with the detailed rows shown beside it.
Keep units and time periods consistent. Use the share or PDF action to preserve the exact assumptions.
Assumptions and scope
The geometric result requires every period return to be greater than −100% and assumes equal-length periods.
The calculator exposes its assumptions instead of filling missing facts with hidden estimates.
Accuracy checks
Confirm the units, dates, rates and source figures before relying on the output.
Round only the displayed answer; Calculator24 keeps full JavaScript precision for intermediate arithmetic and exported values.
Input and output checklist
| Item | What to enter or review |
|---|---|
| Inputs | Periodic returns (%) |
| Equation | arithmetic mean=Σr/n; geometric mean=(Π(1+r))^(1/n)−1 |
| Example | Returns of 10%, −5%, 12% and 8% are compared using both averaging conventions. |
| Limit | The geometric result requires every period return to be greater than −100% and assumes equal-length periods. |
Frequently asked questions
What does this Average Return Calculator calculate?
Calculate arithmetic mean return, compounded geometric return and cumulative growth from periodic returns.
Which formula does it use?
arithmetic mean=Σr/n; geometric mean=(Π(1+r))^(1/n)−1
Does the result update while I type?
Yes. Valid changes recalculate after a short delay and the previous result is not substituted for invalid input.
Which assumptions should I check?
Check units, rates, dates and every source value shown in the form.
Is the result exact?
The geometric result requires every period return to be greater than −100% and assumes equal-length periods.
Can I save or share the calculation?
Yes. Copy, Share, WhatsApp, PDF/Print, CSV, comparison and parameterized-link actions are available.
What to keep in mind
The geometric result requires every period return to be greater than −100% and assumes equal-length periods.
Results display up to 8 decimal places; exported numbers preserve calculation precision. This is a calculation summary, not an official certificate.