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XIRR Calculator | Extended Internal Rate of Return

Annualised Return Calculator helps compute annualised return on your savings/investment. It helps you to benchmark your portfolio return vs other investments.




How to Calculate XIRR or Annualised Returns?

To determine how much funds you'll be earning on annual basis from an investment, you've to calculate the annualized returns on your investments. By measuring these returns you will be in a better position to make strategic and educated investment decisions in life. 

What is Annualized Return?

The calculation of an investment's rate of return acquired in the period of an annual year is known as an annualized return. The annualized return is portrayed as the geometric average which shows what you will earn if the annual return is compounded over a while. Do bear in mind the calculation won't reveal the potential price fluctuations and/or volatility of an investment.

How to calculate annualized return using the Formula and Fintra's Annualised Return Calculator 

One of the formula to calculate the annualized returns of investment is as follows :

Total Return = Final Amount – Initial Amount

Total Return % = 100*(Total Return/ Initial amount)

Annualised Return %= ((1+ TR/100)^(1/t)-1)*100 where TR is Total Return and t is time duration. 

To make the calculations simpler, use Fintra's Annualised Return Calculator. The three fields to fill in are:

  1. Amount Invested
  2. Amount at Maturity 
  3. Time Period (Years)

Hit the 'Submit' button and the results will appear on the side of the calculator. 

FAQs about XIRR or Annualized Returns

 

How is XIRR or Annualised Returns useful for investors?

  • With regards to mutual funds, you can compare the Annualised Returns of that fund with the benchmark returns to get some idea about the performance of that fund, to know if it has performed better than the market or not.
  • To know at what rate the investment needs to grow to reach a final value, investors can use the Annualised Returns Calculator. This final value will later be used to achieve the investors’ financial goals. Once the investors get to know the expected rate of returns, they can then decide to invest in that particular financial instrument whose Annualised Returns is equal to or more than the expected rate of return.
  • It is always suggested to use Annualised Returns methods instead of using absolute returns when investing in equity funds, because Annualised Returns formula and its results provide a better idea of the annual performance of the fund. Absolute returns don't factor in market volatility.

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