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.
BREAKING DOWN '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 Return
The rate of return, usually expressed as a percentage, that represents ... 
Effective Annual Interest Rate
Effective Annual Interest Rate is an investment's annual rate ... 
Stated Annual Interest Rate
The return on an investment that is expressed as a peryear percentage, ... 
Compound Interest
Compound Interest is interest calculated on the initial principal ... 
Periodic Interest Rate
The interest rate charged on a loan or realized on an investment ... 
Annualize
1. To convert a rate of any length into a rate that reflects ...

Bonds & Fixed Income
Accelerating Returns With Continuous Compounding
Investopedia explains the natural log and exponential functions used to calculate this value. 
Fundamental Analysis
How To Calculate Your Investment Return
How much are your investments actually returning? Find out why the method of calculation matters. 
Investing
How does Compound Interest Work?
A quick way to understand the impact of compound interest is to ask yourself if youâ€™d rather receive $100,000 a day for a month, or start with a penny on day one and double it every day for those ... 
Investing
The Effective Annual Interest Rate
The effective annual interest rate is a way of restating the annual interest rate so that it takes into account the effects of compounding. 
Investing Basics
Learn Simple And Compound Interest
Interest is defined as the cost of borrowing money, and depending on how it is calculated, can be classified as simple interest or compound interest. 
Forex
Compound Annual Growth Rate (CAGR)
The compound annual growth rate is an important tool for measuring investment performance and comparing it across asset classes. Discover how it is calculated and how it can inform your investment ... 
Professionals
The Effect Of Compounding
Learn all about this important function that Einstein thought was the greatest mathematical discovery ever. 
Personal Finance
Crafty Compounding
It is easier to become a millionaire now that at any time before. While you won' be buying islands, it is still a goal worth shooting for. 
Savings
How Interest Rates Work on Savings Accounts
Here's what you need to know to grow your rainyday fund. 
Professionals
Introduction
FINRA/NASAA Series 66: Section 2 Measuring Portfolio Returns. This section discusses different return measures: return on investment, holding period, annualized, risk free and total returns.

What is the difference between stated annual return and effective annual return?
Essentially, the effective annual return accounts for intrayear compounding, and the stated annual return does not. The ... Read Answer >> 
What formula can I use to calculate interest on interest?
Find out more about compounding interest, what it measures and how to calculate the amount of compound interest accrued using ... Read Answer >> 
Other than my savings account, what other types of holdings compound my interest?
Understand the benefits of compounding interest, and learn the types of investments that offer compounding in addition to ... Read Answer >> 
How often is interest compounded?
Understand what compound interest is and how the compounding of interest applies to the benefit of investors or creditors, ... Read Answer >> 
How do mutual funds compound interest?
Learn how mutual funds can grow wealth over time through the magic of compound interest by reinvesting dividends back into ... Read Answer >> 
What is the difference between a company's annual return and its annualized return?
Understand the importance of calculating a company's annual return and its annualized return, and learn the differences between ... Read Answer >>