Annualized Return Calculator
Find the annualized (compound yearly) return of an investment from its start and end values and the exact dates you held it, plus total return.
Annualized return is the steady yearly rate that would turn your starting value into your ending value over the exact time you held an investment. It puts a fund you owned for four and a half years and a CD you held for 18 months on the same footing. The calculator counts the holding period in calendar years, down to the day.
How to use this tool
- Enter what the investment was worth, or what you paid, on the start date.
- Enter its value on the end date. If dividends were reinvested they are already in this number.
- Add any dividends or interest you took out as cash.
- Pick the start and end dates to see the annualized and total return.
Formula
Annualized return = ((End + Cash paid out) ÷ Start)^(1 ÷ Years) − 1
Years is the holding period in calendar years: the number of full anniversaries of the start date plus the fraction of the following year that has passed (184 of 365 days ≈ 0.504). Total return is (End + Cash paid out − Start) ÷ Start.
Example
You put $10,000 into a fund on 15 March 2021 and it is worth $14,200 on 15 September 2025. That is 4 full years plus 184 of 365 days, about 4.50 years. The growth multiple is 1.42, so the annualized return is 1.42^(1 ÷ 4.504) − 1 ≈ 8.10% a year. The total return is 42%; dividing 42% by 4.504 gives a simple average of 9.32%, which overstates the compound rate.
Frequently asked questions
Is annualized return the same as CAGR?
They use the same compound-growth formula. CAGR is the usual name for revenue, prices or other values over whole years; annualized return is the usual name for an investment held over any period, including part-years, which is why this version works from exact dates.
Why is my annualized return lower than total return divided by years?
For a gain held longer than one year, compounding makes the compound rate lower than the simple average. For a holding period shorter than a year, the relationship reverses: 10% in half a year annualizes to 21%, while the simple average is 20%.
Should I annualize a return of less than a year?
Be careful. A 5% gain in two months annualizes to about 34%, which assumes the same pace for a full year. The GIPS standards used by investment managers say returns for periods under one year must not be annualized, for exactly this reason.
What if I added or withdrew money along the way?
This calculator assumes a single deposit at the start. With extra deposits or withdrawals, the simple formula mixes your own money with growth; a money-weighted return (XIRR) that uses each dated cash flow is the right measure.
Sources
This tool gives an estimate for general information only. It is not financial, tax, legal or medical advice — check with a qualified professional before you rely on the result.
Last updated: 2026-10-30