Annualized Rate of Return Calculator

Calculate the annualized rate of return (CAGR) for your investments and analyze performance over different time periods

âœ“ CAGR Calculation âœ“ Performance Analysis âœ“ Growth Projections

Calculate Annualized Rate of Return

Investment Details

Initial Investment ($)

Final Value ($)

Time Period

Number of Years

Additional Contributions (Optional)

Additional Contributions ($)

Total additional money invested during the period

Dividends/Distributions ($)

Total dividends or distributions received

Comparison & Analysis

Benchmark Return (%)

Compare against market benchmark (e.g., S&P 500 average)

Risk-Free Rate (%)

Current risk-free rate (e.g., Treasury bonds)

CAGR Formula

CAGR = (Final Value ÷ Initial Value)^(1/n) - 1

Where n = number of years

Total Return = (Final - Initial) ÷ Initial Ã— 100

Quick Examples

Stock Investment

$10K â†’ $15K over 3 years

Real Estate

$200K â†’ $280K over 5 years

Mutual Fund

$5K â†’ $8.5K over 7 years

Historical Benchmarks

S&P 500 (Long-term): ~10%

Bonds (10-year): ~4-6%

Real Estate: ~8-12%

Inflation Rate: ~2-3%

Understanding Annualized Returns

The annualized rate of return, also known as Compound Annual Growth Rate (CAGR), measures the mean annual growth rate of an investment over a specified period longer than one year.

CAGR: Smooths out volatility to show steady growth rate
Total Return: Overall percentage gain or loss
Time-weighted: Accounts for compounding effects
Comparable: Standardizes returns across different periods

Investment Analysis Tips

Long-term Perspective

CAGR is most meaningful for investments held for multiple years.

Risk Consideration

Higher returns often come with higher risk and volatility.

Benchmark Comparison

Compare your returns against relevant market benchmarks.