Formula
The same compound relationship as a growth rate, read as an interest rate:
Rate = (ending / starting) ^ (1 / years) − 1
The annual-return page uses this math for an investment's start and end values.
Assumptions
- Interest compounds once a year.
- No other deposits were added.
Worked example
$10,000 growing to $12,100 in 2 years earned 10.00% a year.
Input definitions
- Ending balance
- The deposit plus the interest after the years you type.
Limitations
This is an estimate, not a loan offer, tax filing, or investment advice. The currency control changes the symbol only.
Questions
Why is $12,100 from $10,000 in two years equal to 10%?
1.10 × 1.10 is 1.21, and 1.21 × $10,000 is $12,100.
Does this handle monthly deposits?
No. Additions would make the solved rate too high or too low.