Investment Return Calculator

What it is for

For anyone who wants to know how much an investment really earned. Enter the starting value, the ending value and the time in years, and the tool shows the total return and the annualized return (CAGR), which lets you compare investments held for different periods fairly.

How it works

Total return is the ending value minus the starting value, divided by the starting value, times 100. The annualized return (CAGR) is the constant yearly rate that would take the starting value to the ending value over the period: divide ending by starting, raise to one over the years, and subtract 1. It ignores contributions or withdrawals in between, as well as fees and taxes.

Worked example

You invested 10,000 and five years later it reached 16,000. The total return was 60%. The annualized return, the yearly rate that explains that compound growth, was about 9.86% a year. Another investment that gained 60% over ten years would earn far less per year.

Limits and caveats

It considers only starting and ending value: no contributions, withdrawals, fees, taxes or inflation. Past performance does not guarantee future results. It is not investment advice.

Frequently asked questions

What is the difference between total and annualized return?

Total return shows how much the investment grew over the entire period. Annualized converts that into a yearly rate, letting you compare investments held for different lengths. A large total return over many years can be small per year.

What is CAGR?

It is the compound annual growth rate: the constant rate that, applied year after year, takes the starting value to the ending value. It smooths out ups and downs and lets you compare the growth pace of different investments.

Does it work if I made monthly contributions?

Not directly, because the tool assumes a single starting amount with no new deposits or withdrawals. With regular contributions the computed return would be distorted, and you would need a method that accounts for the date of each cash flow.