Annualized Return Calculator

Convert total return into an annualized rate for apples-to-apples comparison of different investments.

Free • Accurate • Instant Results

Annualized Return Inputs

Initial Investment

Final Value

Years Held

Annualized Return (CAGR)

📊

9.86%

Total Return

📈

60.00%

Total Gain

💰

$6,000

Final Value

💵

$16,000

🤖

AI Insights

Personalized analysis based on your inputs

💡

Why CAGR Matters

Your CAGR of 9.86% normalizes returns across the 5-year period, making it comparable to other investments regardless of holding length.

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Formula Used

CAGR

CAGR = (Final / Initial)^(1/years) − 1

Variables

Final= Ending investment value

Initial= Starting investment value

Example

$10,000 → $16,000 over 5 years: CAGR = (16000/10000)^(1/5) − 1 = 9.86%

Frequently Asked Questions

Total return doesn't account for time. CAGR smooths returns into an annual rate, making it possible to fairly compare investments held for different periods.

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📐

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Disclaimer: This calculator is for informational and educational purposes only. Results are estimates based on inputs you provide. They are not financial, tax, investment, or legal advice. Consult a qualified financial professional before making financial decisions. Actual results may vary based on market conditions, tax laws, and individual circumstances.