# Annualized Rate of Return

Written by Jerry Ratzlaff on . Posted in Manufacturing Engineering

Annualized rate of return, abbreviated as AROR, is the equivalent annual return that an investor earns over the investment holding period.

## annualized rate of return Formula

 $$\large{ AROR = \left[ \frac{ IV \;+\; GL }{ IV } \right] ^ { \left( \frac{ 1 }{ HP } \right) -1 } }$$

### WHERE:

$$\large{ AROR }$$ = annualized rate of return

$$\large{ GL }$$ = gains or losses

$$\large{ HP }$$ = holding period

$$\large{ IV }$$ = initial value