There are 3 things you need to know about investment returns.

1. Absolute Return

This calculation requires initial value, final value and time period.

[(Final Value) / (Initial Value)] / Initial Value * 100%

2. Compounded Annual Growth Rate (CAGR)

This calculation requires initial value, final value and time period.

[(Final Value) / (Initial Value)] ^ (1/n) – 1

3. IRR and XIRR 

IRR requires cash flow and time period. 

IRR requires cash flow and specific time period. 

Invest Couple recommends XIRR to measure investment returns.

Curated Resources about these terms: