Investment Return Calculator

Calculate the annualized return of your investments

Quick answer

Investment Return Calculator

This calculates the compound annual growth rate (CAGR) of your investment, showing the average yearly return over the investment period.

Formula

Annual Return = ((Final Value / Initial Value)^(1/Years)) - 1

đŸ’ŧ Investment Details

📊 Return Analysis

📈Formula

Annual Return = ((Final Value / Initial Value)^(1/Years)) - 1

💡How it works

This calculates the compound annual growth rate (CAGR) of your investment, showing the average yearly return over the investment period.

ℹī¸ What is Investment Return Calculator?

An investment return calculator measures how much an investment has grown, expressed as absolute gain, percentage return, and annualized rate. It helps compare different investments, benchmark against market indices, and project future portfolio values.

📐 Formula

Total Return = ((Final − Initial + Dividends) / Initial) × 100
Final— Current or sale value of the investment
Initial— Original purchase price
Dividends— Any income received during the holding period
CAGR— (Final/Initial)^(1/years) − 1 × 100 — annualized return

✏ī¸ Worked Example

Initial Investment: $10,000
Final Value: $16,500
Dividends Received: $800
Holding Period: 5 years
  1. 1Total gain = ($16,500 − $10,000) + $800 = $7,300
  2. 2Total return = $7,300 / $10,000 × 100 = 73%
  3. 3CAGR = (($16,500 + $800) / $10,000)^(1/5) − 1
  4. 4CAGR = (1.73)^(0.2) − 1 ≈ 1.1157 − 1 = 11.57%/year
✅ Result: Total Return = 73% | CAGR = 11.57% per year

💡 How to Interpret Results

  • ▸Compare your CAGR to the benchmark (S&P 500 avg ~10%/year) to judge relative performance.
  • ▸A 10% annual return doubles money in ~7.2 years (Rule of 72).
  • ▸CAGR smooths out volatile year-to-year returns to show the "steady" equivalent growth rate.
  • ▸Always account for fees, commissions, and taxes when calculating actual return.
  • ▸Real return = nominal return − inflation (~3%). That 10% return is really ~7% in purchasing power.

❓ Frequently Asked Questions

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