What is CAGR (Compound Annual Growth Rate)?

CAGR represents the mean annual growth rate of an investment over a specified period longer than one year, assuming reinvestment of gains. It smooths out volatility for cleaner comparison.

How is total return calculated?

Total return = (Ending Value - Beginning Value) / Beginning Value × 100. This includes capital gains plus dividends or interest, expressed as a percentage.

What's a good investment return rate?

Historical stock market averages are 7-10% annually. Good depends on risk level: savings accounts target 3-5%, bonds 4-6%, stocks 7-10%, with higher-risk investments potentially more.

How do I account for inflation in returns?

Subtract inflation rate from nominal return for real return. A 7% return with 3% inflation equals 4% real return in purchasing power growth. Real returns matter for long-term planning.

Why use CAGR instead of average annual return?

CAGR accounts for compounding and shows actual growth rate. Average return can be misleading—50% gain followed by 50% loss averages 0% but results in 25% loss.

How do fees impact investment returns?

Fees compound negatively. A 1% annual fee on 7% gross return means 6% net return. Over 30 years, this reduces ending value by roughly 25% compared to no fees.

What timeframe should I use to evaluate returns?

Longer timeframes (10+ years) provide better perspective. Short-term returns are highly variable. Compare against appropriate benchmarks for the investment type.

How do I compare returns across different investments?

Use CAGR for equivalent comparison. Adjust for risk (higher-risk investments should have higher returns). Consider tax implications and liquidity differences.

Investment Return Calculator

Calculate total and annualized investment returns

Instant results•No signup•Estimates only

Initial Investment

Final Value

Investment Period

Annualized Return (CAGR)

+8.45%

Total Return

+$5,000

Total Return %

+50.00%

Monthly Return

+0.68%

Doubling Time

8.524 yrs

Visualization

Growth Projection

Total Value
Contributions

Final Value

$52,403

Total Contributed

$40,000

Earnings

+$12,403

Results are projections based on consistent contributions and rates.

Results are estimates for informational purposes only and do not constitute financial advice. Actual savings may vary based on interest rate changes, contribution consistency, and account terms.

How calculations work Full disclaimer

Investment Return Calculator Formula

C A GR = (\frac{V _{f}}{V _{i}})^{\frac{1}{n}} - 1

Compound Annual Growth Rate (CAGR) shows the smoothed annual return. V_f is final value, V_i is initial value, and n is years. This provides a single growth rate that would result in the same final value if applied consistently each year.

How the Investment Return Calculator Works

1Enter your initial investment amount
2Input the final value of your investment
3Specify the investment period in years
4View your CAGR and total return
5Compare against benchmarks like market indices

Investment Return Calculator Key Terms

CAGR: Compound Annual Growth Rate—the smoothed annual return that would grow initial investment to final value over the period.
Total Return: The complete percentage gain or loss including all capital gains, dividends, and income.
Annualized Return: Return expressed as a yearly rate for comparison across different investment periods.
Absolute Return: The raw dollar gain or loss on an investment, without considering time.

Investment Return Calculator Tips

•CAGR smooths out volatile years to show the equivalent steady growth rate
•Compare CAGR to relevant benchmarks (S&P 500, bond indices)
•Longer periods provide more meaningful CAGR comparisons
•Account for fees and taxes when calculating actual returns
•Past returns don't guarantee future performance

When to Use This Investment Return Calculator

✓Evaluating investment performance over multiple years
✓Comparing investments with different holding periods
✓Understanding your portfolio's growth rate
✓Comparing personal performance to market benchmarks
✓Analyzing the impact of investment decisions

Investment Return Calculator Examples

Stock Investment

Initial:$10,000Final:$18,000Years:5

Result:80% total, 12.5% annualized

Investment grew 80% total, equivalent to 12.5% compounded annually over 5 years.

Real Estate

Purchase:$200,000Sale:$320,000Years:7

Result:60% total, 7.0% annualized

$120,000 profit represents 60% total return or 7.0% per year.

Short-Term Trade

Initial:$5,000Final:$5,800Months:6

Result:16% total, 35% annualized

16% in 6 months equals 35% annualized return. Short periods amplify annualized rates.

Understanding Investment Return in Depth

Measuring investment returns accurately is essential for evaluating performance and making informed future decisions. This calculator provides key return metrics that help you understand how your investments have actually performed.

Why CAGR Matters

Simple average returns can be misleading. If you gain 50% one year and lose 50% the next, your simple average is 0%—but you actually lost 25% (starting with $100, up to $150, down to $75). CAGR captures the actual geometric growth rate.

Interpreting Your Results

Compare your CAGR to relevant benchmarks. The S&P 500 has historically returned about 10% annually including dividends, or 7% after inflation. Bond indices average 4-6%. If you're underperforming comparable benchmarks consistently, consider your investment strategy.

The Limitations of Historical Returns

Past performance doesn't predict future results. A fund with 15% CAGR over the past decade might underperform next decade. Use historical returns to evaluate decisions and strategy, not to project future wealth.

Adjusting for Reality

True returns should account for: investment fees (which reduce returns by 0.1-2% annually), taxes on gains and income, inflation (which reduces purchasing power), and any contributions or withdrawals during the period.

Investment Return Calculator FAQs

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Marcus Chen

Financial Analysis Specialist

Marcus has over 12 years of experience in quantitative finance and personal financial planning. He specializes in loan analysis, investment modeling, and consumer debt strategies. His methodologies incorporate industry-standard financial mathematics used by major lending institutions.

Content reviewed: January 2026Next review scheduled: 2027

Editorial Standards: All calculations use industry-standard financial formulas. Content is reviewed for mathematical accuracy and updated to reflect current market conditions. This tool provides estimates for informational purposes and does not constitute financial advice.