# How to Calculate the Holding Period Return Melpomenem/iStock/Getty Images

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The Holding Period Return is an investment measure that calculates the return you have received on your investment over the length of time that you have held the investment. It is a simple calculation that can be used to compare your rate of return against a target rate of return or to compare different investment opportunities to see which one produces the highest return. Annualizing the HPR allows you to compare investments with different holding periods to each other.

## Calculating the HPR

Gather together the investment statements of the investments for which you want to calculate the HPR. The information you will need is the initial value of the investment when you purchased it, the income you have received in the length of time you have held the investment including interest, dividends and capital gains and the ending value of the investment if it is different than the initial value.

The HPR is calculated as follows: [Income + (ending value - beginning value)]/beginning value Let's look at an example. A stock that you have been holding in your portfolio for six months has paid dividends of \$47 and is currently worth \$693. You purchased the stock six months ago for \$550. The HPR would be: [\$47 + (\$693 - \$550)]/\$550 or 34.5% You have had a 34.5% return on your investment over the length of time you have held it.

If you want to calculate the HPR on a discount bond, you would simply take the difference between what you purchased the bond for and its current value. For example, if you purchased a bond last month at \$943 and its face value is now \$958, your holding period return would be: (\$958 - \$943)/\$943 or 1.6%