Annualizing a return provides a standard that allows you to compare rates with different time periods. You can compare them easily by computing each rate as if it was for a full year.

Calculation

Annualized Rate is calculated as:

[(1+cumulative return rate)^(1/(# of days for the return/365))]-1

Example Calculation

Let's say you have a 74.47% cumulative return for 4291 days. To calculate the annual percentage rate, you would use the following calculation:

[(1+.7447)^(1(4291/365))]-1

You'll find that the annual rate would be 4.848252%.