NBNumbarn

Average Return Calculator

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How it works

Arithmetic mean adds returns and divides by years—it overstates actual growth. Geometric mean = (product of (1+r) for each year)^(1/n) − 1, which equals CAGR and accurately represents compounded growth. A 50% loss followed by a 50% gain leaves you 25% below start, not flat. Use geometric mean for performance evaluation.

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