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What Is An Annual Return

The return an investment offers over time is known as the annual return. A time-weighted annual percentage is used to represent the annual return. In this case, dividends, capital gains, and return on capital can all be sources of returns.

The annual rate will often not consider the impact of compounding interest if the yearly return is given as an annual percentage rate. However, when the yearly return is stated as an annual percentage yield, compound interest benefits are considered.

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