When you invest in a stock or an investment fund you may find out how your investments are doing on a monthly or quarterly basis. Determining your annual return it is not as simple as adding up these percentages, or even adding them up and dividing by either four or 12. The math is more complex.

- Skill level:
- Easy

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### Things you need

- Monthly or quarterly returns in percentage form

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## Instructions

- 1
Gather your monthly or quarterly stock or investment return totals for the past year. These totals should be calculated in percentage format and can be found on your investment statements. If you cannot locate the return totals in percentage format, follow Step 2 to calculate them.

- 2
Take the amount of money in your investment account at the end of the time period, whether it is a month or a quarter, and subtract the amount you had in the account at the beginning of that month or quarter. Take that number and divide it by the amount you had in the account at the beginning of the period. For example, if you had £65 in an investment account at the beginning of the quarter and at the end of the quarter you have £68, subract £65 from £68 for a total of £3. Divide £3 by £65, which makes your quarterly return 5 per cent.

- 3
Convert your monthly return or your quarterly return from a percentage to a decimal. To do this divide the percentage total by 100. In this example five divided by 100 gives you a decimal value of .05.

- 4
Calculate your annual return if you have 12 monthly return values. Add one to each month's return value. For example, for a month with the 5 per cent return value you will add one to .05 for a total of 1.05. Multiply each of these values times each other. In this example, 1.05 will be multiplied by 1.05 12 times. Take your answer and subtract one from it. In this example you get 1.79 and deduct 1 from it for a total of .79.

- 5
Figure your annual return if you have quarterly return values. This requires fewer computations. Assume the quarterly return is 5 per cent with a decimal value of .05, again. Add one to it, giving you a total of 1.05. Multiply the four totals you receive by each other and then deduct one. In the example, each number is 1.05, so you multiply 1.05 by 1.05 four times and then deduct one. Your result is 1.21, minus one for a total of .21.

- 6
Multiply the result you got in Step 4 or Step 5 by 100. This will equal your annual percentage of return. In Step 4 it is 79 per cent in this example and in Step 5 it is 21 per cent.

#### Tips and warnings

- It is common for your quarterly or monthly returns to have different percentages. Make sure you convert each to a decimal and add one before doing the multiplication.
- Be sure to use a calculator for the multiplication. Doing multiplication four or 12 times using longhand can take a long time and increase the chance for mathematical errors.