There are cases when the compounding effect doesn’t apply, and the Holding Period Return Calculator would come handy. There are a lot of investments and portfolios which provide the returns to the holders with effect to compounding.

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Well, this necessarily doesn’t stand to be in effect if investors want to find out the rate of return for the entire period the investment is held, by simply adding up the percentages return over the period of time, as it would nullify the effect of compounding. So, in such a case, this holding period return formula does the job.

Holding Period Return Calculator

Rate of Return (%)*
Rate of Return (%)*
Rate of Return (%)*
Rate of Return (%)*
Rate of Return (%)*
Rate of Return (%)*
Rate of Return (%)*
Number of Periods / Time*

Holding Period Return (%)

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    Holding Period Return Calculator Details

    Taking into consideration you need a certain number of factors to thereby calculate the holding period return formula, here is what you will need.

    • Rate of return of multiple periods
    • multiple periods or time

    Analysts, with the precise knowledge they got, suggest investors to invest in such investment options which fetch returns by compounding.

    Compounding refers to interest bearing returns as well. So, in order to avoid the incorrect calculation of simple rate of return, you need to follow the holding period of return by using the return percentage of each of the period and the total number of years.

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    Holding Period Return Calculator Product Details

    By now, you shall be able to understand why you are in need of this formula, the time when you will be using it and the factors which are together to be obtained in order to solve the formula.

    Having a clear view you need to apply the factors in the place they will belong followed by which you will have the results. The product here is the point of formula itself, i.e. the holding period return.

    Holding period is the entire number of periods for which you will hold the particular investment option in question and enjoy the returns.

    How to use Holding Period Return Calculator?

    It is pretty much easy to use the holding period calculator. Each one of us invests in securities and assets which are to fetch us a return over the course of time.

    Each of the return is generally stated per year wise and hence, investors would love to know the return made altogether, i.e. for the entire period, taking into account compounding.

    So, you have to get all the factors in one place, i.e. the calculator and that shall be enough. Enter the factors in the right places as directed in the calculator and the press enter, = so you get the working along with the calculator at the end of it.

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    Example of Holding Period Return Calculator Usage

    Let us assume a company provided an investor returns for a consecutive 7 years, and the investor wants to know how much the return in total is. Here is what he needs to do:

    The formula is:

    Holding Period Return (%) = ((1+R1) * (1+R2) * (1+Rn)) – 1

    Here is the workout:

    Holding Period Return (%) = [(1+8)*(1+6)*(1+8)*(1+12)*(1+15)*(1+3)*(1+5)]-1

    So, the investors enters in all the details in the calculator, when the calculator will show the working as given above with the displayed result 72.2%

    What is the use of Holding Period Return Calculator?

    The basic use stands to be in terms of compounding as we studies, because the simple interest would provide just the interest rate made from investment in total, but in compounding interests fetch returns as well.

    So the other use is to perform a comparison between investment options and increase the understanding of market behavior and investment options.

    The holding period return also determines the tax implications imposed on the investment from the date the investment was bought till the date the investment was held for the last time.

    The holding period we speak of helps determine the tax implications.

    Holding Period Return Calculator Formula

    So, the formula of the holding period return goes by:

    Holding Period Return Calculator


    R = rate of return of multiple periods

    n = number of periods or time

    This formula is the basic way of obtaining the entire return, in percentage, made from a security which was held for a certain period of time.

    The investment option can be anything, and you can create a pretty good portfolio, as you will be evaluating where you made maximum returns from. This formula is used for investments which follow the fashion of compounding while providing returns.

    Holding Period Return – Conclusion

    So, now you know how to find out the total return on investment of a security which has been held for a particular time by you.

    Also, you will be able to compare the returns you made from two different investments you held and perform a quick comparison. So, if the calculator puts you through a tough time getting the results, let us know in the comment section below.

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