# Annualized Return

*Saving & Investing — Finicade finance glossary*

Annualized return converts a return over any period into its yearly equivalent, so a three-month and a five-year result can be compared. The compounding is what matters: a 2% quarterly return annualises to 8.24%, not 8%. Annualising very short periods is the standard abuse — projecting one strong month into a 100%+ annual figure is arithmetically valid and financially meaningless.

**Also known as:** annualised return, per annum return

**Related terms:** [CAGR (Compound Annual Growth Rate)](https://finicade.com/glossary/cagr), [Holding-Period Return](https://finicade.com/glossary/holding-period-return), [Total Return](https://finicade.com/glossary/total-return), [Time-Weighted Return](https://finicade.com/glossary/time-weighted-return), [Expected Return](https://finicade.com/glossary/expected-return)

Source: https://finicade.com/glossary/annualized-return