WorthMorrow

Investment Return Calculator

This calculator turns a starting value, an ending value and the time held into a total return and an annualised return, with an optional adjustment for inflation. It is for a single lump-sum investment with no money added or withdrawn during the period.

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Educational estimates, not advice. Results depend on the assumptions you enter and are not predictions or personalised financial, investment, tax or legal advice. Read the financial disclaimer.

Calculator

Total gain or loss

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Total return

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Annualised return (CAGR)

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Annualised return after inflation

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Your investment

Distributions not already included in ending value. Treated as received at period end; do not add reinvested income twice.

Time and inflation

Optional. Used only for the inflation-adjusted figure.

How the calculation works

Total return compares the ending value plus any income with the starting value. Annualised return converts that result into the steady yearly rate that would produce it. Real annualized return = (1 + nominal annualized return) / (1 + annual inflation) − 1. This calculator does not calculate TWR, MWR or XIRR.

Annualised return = ((ending value + income) ÷ starting value)1/years − 1

Key assumptions

  • No money was added or withdrawn during the period. If it was, use a time-weighted or money-weighted method instead.
  • Only distributions not already reflected in ending value are added. They are treated as arriving at period end; actual timing can change the investor’s return.
  • Use ending value and eligible distributions consistently net or gross of fees and taxes. The calculator makes no separate deductions.
  • Past returns do not indicate future returns.

Worked example

An investment grows from 10,000 to 13,310 over 3 years with no income received and no money added (figures in US dollars):

  • Total return: (13,310 − 10,000) ÷ 10,000 = 33.1%
  • Annualised return: 1.3311/3 − 1 = 10.0% a year

How to interpret the result

Compare the annualised figure, not the total, when periods differ in length. Then compare it with a relevant reference, such as an index for the same type of asset or inflation. The inflation-adjusted figure shows the change in purchasing power.

Common mistakes

  • Using this calculator when you added money during the period.
  • Comparing a total return over three years with one over ten.
  • Adding reinvested dividends again when they are already included in ending value.
  • Judging a decision on a short period.