How do I calculate an annual percentage yield based off quarterly returns?

I am looking at some of my investments and have calculated what their quarterly returns are, but I want to know how to calculate the yearly return based off of those quarterly returns, while taking compounded interest into account.

Its similar to finding an APY, but the difference is that the rate of return is changing every quarter.

For example: if I return 25% every quarter, that doesn't mean I had a 100% return because I haven't taken into account the compounding interest.

I want a formula that DOES take that compounded interest into account. Thanks

I understand how to do it with a cash flow, but I'm looking for a formula or other method that looks at STRICTLY the % returns.

The best method to compute such a return is to use IRR (internal rate of return) using a spread sheet like Excel. For instance, you would lay out your cash flows like this:

-100 (Initial Investment at period 0)
+6.25 (first quarter's return at 25% per annum)
+6.64 (second quarter's return at 25% per annum)
+7.06 (third quarter's return)
107.50 (fourth quarter's return + return of your principal)

The internal rate of return for this series of cash flows is the yield which would make the net present value of the cash flows equal to zero. For these cash flows, the return is 27.3%

Note: I assumed the rate of return was 25% per annum in this example, not 25% each quarter (or over 100% per annum).

The easiest way is to just find out how much you earned and divide by the amount you started with and multiply by 100 for the percentage.

e.g. Start with 1000, and the end of 4 quarters my dividends equal 185, then my APY is 18.5%

Excel will probably do it with one of it's financial functions..

long hand

base figure say 100
Q1 return say 20% = new base (100+20) = 120

Q2 return say 10% = new base (120+120*.1))=132

Q3 return say 10%= new base (132+(132*.1)=145.2

Q4 return say 25%=145.2+(145.2*.25)= 171.5(Total Return)

Return = (171.5/100)-1 i.e. (Total Return/Original Base-1)

= 71.5% in this example.