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Average Return Calculator
About the Average Return Calculator
Find the total and average annual return of an investment from its starting and ending value, including the compound annual growth rate (CAGR).
How to use the Average Return Calculator
- Enter the Starting Value and Ending Value.
- Enter the Investment Period (Years).
- Press Calculate Returns.
Formula and method
Total return: (End − Start) ÷ Start × 100. Compound annual growth rate: CAGR = (End ÷ Start)^(1 ÷ years) − 1.
Worked example
$10,000 growing to $15,000 in 5 years is a total return of 50% and a CAGR of 8.45% per year (the simple average would be 10%).
Tips
- CAGR is a better measure than the simple average because it accounts for compounding.
- Include contributions and withdrawals carefully; this calculator assumes none.
Frequently Asked Questions
Because growth compounds. A steady 8.45% a year for 5 years gives the same end result as 50% in total.