Annual Rate of Return Calculator
Use this calculator to determine the annual return of a known initial amount, a stream of deposits, plus a known final future value.
How the annual rate of return calculator works
It finds the single compound annual growth rate (CAGR) that turns your starting value into your ending value over the years held, smoothing an uneven investment journey into one comparable rate.
Worked example: with initial value of $10,000, final value of $24,000 and years held of 10, the annual rate of return calculator shows compound annual return (cagr) of 9.15%.
- Total gain
- $14,000
- Total return
- 140.0%
- Annualized (CAGR)
- 9.15%
- Growth multiple
- 2.40×
The formula
CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the annual rate of return calculator
What is CAGR?
The compound annual growth rate — the steady yearly rate that would take an investment from its start value to its end value over the period, ignoring the bumps along the way.
Why use CAGR instead of total return?
CAGR annualises the return so you can compare investments held for different lengths of time on an equal, per-year basis.
Does CAGR reflect actual year-to-year returns?
No — real returns vary year to year. CAGR is the smoothed average that produces the same final result, useful for comparison rather than describing the path.
Is the Annual Rate of Return Calculator free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.