DEFINITION of 'Compound Net Annual Rate  CNAR'
The return on an investment after taking tax implications into consideration. The compound net annual rate (CNAR) is much like an investment's compound annual rate except that tax liability is taken into account. CNAR is a truer representation of investment returns because it illustrates investors' actual return after taxation, rather than just unrealized gains or losses.
INVESTOPEDIA EXPLAINS 'Compound Net Annual Rate  CNAR'
For example, if an investor invests $1,000 in a oneyear certificate of deposit (CD) with an interest rate of 5% paid annually, their expected annual return on this investment is $50. However, if interest income is taxed at 30%, the investor's compound net annual rate of return is actually 3.5%, or $35 ($50 x $0.70). As you can see, CNAR gives a much more accurate real return for an investor.

Compound Annual Growth Rate  CAGR
The yearoveryear growth rate of an investment over a specified ... 
Average Annual Growth Rate  AAGR
The average increase in the value of an individual investment ... 
Compound Return
The rate of return, usually expressed as a percentage, that represents ... 
Average Return
The simple mathematical average of a series of returns generated ... 
TimeWeighted Rate of Return
A measure of the compound rate of growth in a portfolio. Because ... 
Rate Of Return
The gain or loss on an investment over a specified period, expressed ...

What's a good forex strategy to use when spotting a Wedgeshaped Pattern?
Use wedgeshaped patterns to identify bullish or bearish price action when trading currencies in the foreign exchange (forex) ... Read Full Answer >> 
What's the most accurate way to find out a nation's nominal GDP?
The data for gross domestic product, or GDP, is compiled by statistical governmental agencies in each country and is aggregated ... Read Full Answer >> 
How does transfer pricing help business?
Transfer pricing involves the trade of goods or services between two related companies, and both can come out the winner. ... Read Full Answer >> 
How can I create a yield curve in Excel?
You can create a yield curve in Microsoft Excel if you are given the time to maturities of bonds and their respective yields ... Read Full Answer >> 
What are the different formations of yield curves?
There are three main different formations of yield curves: normal, inverted and flat yield curves. The yield curve describes ... Read Full Answer >> 
How do I calculate my effective tax rate using Excel?
Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >>

Active Trading Fundamentals
Charting Your Way To Better Returns
Learn about the powerful hybrid techniques that take advantage of both technical and fundamental analysis. 
Bonds & Fixed Income
Find The Highest Returns With The Sharpe Ratio
Learn how to follow the efficient frontier to increase your chances of successful investing. 
Active Trading Fundamentals
Efficient Market Hypothesis: Is The Stock Market Efficient?
Deciding whether it's possible to attain aboveaverage returns requires an understanding of EMH. 
Options & Futures
Find Quality Investments With ROIC
Return on invested capital is a great way to measure the true value produced by a company. Learn to use the ROIC metric and increase your chances of finding successful investments. 
Fundamental Analysis
The EquityRisk Premium: More Risk For Higher Returns
Learn how the expected extra return on stocks is measured and why academic studies usually estimate a low premium. 
Investing Basics
Explaining WriteDowns
A writedown is a reduction in the book value of an asset because it is overvalued compared to the market value. 
Fundamental Analysis
Calculating Future Value
Future value is the value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today. 
Economics
What is Deadweight Loss?
Mainly used in economics, deadweight loss can be applied to any deficiency caused by an inefficient allocation of resources. 
Economics
How to Do a CostBenefit Analysis
The benefits of a given situation or businessrelated action are summed and then the costs associated with taking that action are subtracted. 
Professionals
Why You Should Avoid Fixating on Bond Duration
Financial advisors and their clients should then focus on a bond fund’s portfolio rather than relying on any single metric like duration.