# How to calculate annualized return from monthly returns in Excel

Compound the monthly returns and scale to 12 months: `=PRODUCT(1+B2:B10)^(12/COUNT(B2:B10))-1`.

**Excel:** `=PRODUCT(1+B2:B10)^(12/COUNT(B2:B10))-1` (Every current version)

**Google Sheets:** `=ARRAYFORMULA(PRODUCT(1+B2:B10)^(12/COUNT(B2:B10))-1)`

## Example

Sample data (row 1 is the header):

| A | B | C | D |
| --- | --- | --- | --- |
| Month | Return |  | Annualized return |
| Jan | 0.012 |  |  |
| Feb | -0.004 |  |  |
| Mar | 0.021 |  |  |
| Apr | 0.008 |  |  |
| May | -0.013 |  |  |
| Jun | 0.017 |  |  |
| Jul | 0.006 |  |  |
| Aug | 0.011 |  |  |
| Sep | -0.002 |  |  |

Formula in D2: `=PRODUCT(1+B2:B10)^(12/COUNT(B2:B10))-1`

Result: 7.66%

## How it works

`1+B2:B10` turns each return into a growth factor (1.012, 0.996, …), and PRODUCT multiplies them into the growth over nine months. Raising that to the power 12/9 stretches it to a year, and subtracting 1 turns it back into a rate. Google Sheets needs ARRAYFORMULA for the `1+B2:B10` part.

## Other ways

- `=AVERAGE(B2:B10)*12`: Twelve times the average month is a rough estimate that ignores compounding. (A rough 7.47%.)
- `=PRODUCT(1+B2:B10)-1`: The total return over the nine months, without annualizing. (Total for nine months: 5.69%.)

## Common mistakes

- Annualizing a few months of returns projects them onto a whole year. Treat short periods with care.
- Returns must be decimals (1.2% or 0.012), not 1.2.

## Questions

**How do I annualize from a start and end value?**

Use the dates: `=(end/start)^(365/(end_date-start_date))-1`.

**How do I annualize daily returns?**

Use 252 trading days: `=PRODUCT(1+B2:B200)^(252/COUNT(B2:B200))-1`.

Every formula and result on this page was checked by running it in the Spreadsheet Practice formula engine on 2026-10-30.

Source: https://spreadsheetpractice.com/formulas/annualized-return-from-monthly-returns