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Annualized Return Calculator

$
$

The holding period is the day count divided by 365.25, which absorbs leap years.

Compound annual growth rate
9.5944%Over 10.0014 years, 3,653 days, time-weighted
Total return, cumulative
+150.00%
Growth multiple
2.500x
Gain, USD
$15,000
Holding period, years
10.0014
USD · by year

The curve is the constant rate applied from the beginning value. It is what CAGR means, not a path anything took.

Hypothetical illustration, computed only from the two values and the two dates entered. CAGR is a two-endpoint measure and assumes no deposits or withdrawals between the two values. Cash added or taken out along the way makes the endpoints incomparable, and that question is money-weighted (an internal rate of return), which this calculator does not compute.

The holding period is the day count between the two dates divided by 365.25. Nothing here accounts for taxes, fees or inflation.

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What this does

Annualized return converts a total gain into the steady yearly rate that would have produced it. A 150% gain sounds enormous until the period is known: spread over ten years it is under 10% a year. Comparing two records of different lengths is what the conversion is for.

Worked example

$10,000 that becomes $25,000 over ten years is a 150% total return and a 9.5958% compound annual rate. The second figure is smaller because each year’s 9.5958% applies to a larger balance than the year before.

Mistake it prevents

Dividing the total return by the number of years. That gives 15% a year here, overstating the rate by more than half, because it ignores that the gain compounds.