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Savings & Investing

Investment Return Calculator

Calculate the total return and annualized return (CAGR) of any investment from its starting and ending value.

USD
USD
years
Total gain
$8,000.00
Total return
80%
Annualized (CAGR)
12.47%
Growth multiple
1.8ร—

CAGR assumes no deposits or withdrawals during the holding period. Dividends are included only if your "value now" includes them.

How investment returns are measured

This tool turns a simple before-and-after pair of numbers into the two figures investors actually compare: the total return (how much your money grew overall) and the annualized return, or CAGR (what that works out to per year, with compounding).

Worked example

Suppose you invested 10,000 and it's worth 18,000 five years later. Your total gain is 8,000, which is an 80% total return. The annualized return is (18,000 รท 10,000)1/5 โˆ’ 1 โ‰ˆ 12.5% per year. That 12.5% is the number to compare against other investments, savings rates, or index funds over the same period.

Why annualizing matters

A 40% return sounds great โ€” but over ten years it is under 3.5% per year, which a savings account sometimes beats. Annualizing puts investments with different holding periods on the same footing so you can judge them fairly.

Frequently asked questions

+What is CAGR?

CAGR (Compound Annual Growth Rate) is the single yearly growth rate that would take your investment from its starting value to its ending value over the holding period. It smooths out the ups and downs into one comparable number.

+Why is my annualized return lower than my total return?

Total return measures the whole period at once, while CAGR spreads it across the years with compounding. An 80% total return over 5 years works out to about 12.5% per year, not 16%, because each year's growth builds on the last.

+Does this account for deposits and withdrawals?

No. If you added or removed money during the period, the simple CAGR shown here will be distorted. For portfolios with cash flows you would need a money-weighted return (IRR), which we plan to add as a separate tool.

+Is a higher CAGR always better?

Not by itself โ€” it says nothing about risk. A volatile asset and a stable one can have the same CAGR over a period while behaving very differently along the way. Compare returns together with risk and your time horizon.

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