How the calculation works
Total return tells you how much an investment grew in all. Annualized return, or CAGR, turns that into one yearly rate, so you can compare investments held for different lengths of time.
Total return = End / Start − 1
CAGR = (End / Start)1 / years − 1
Real return = (1 + CAGR) / (1 + inflation) − 1
Start = starting value · End = end value · years = length of the period in years (months count as twelfths).Worked example
An investment of 10,000 is worth 25,000 after 10 years.
- Total return: 25,000 / 10,000 − 1 = 1.5, or 150%.
- CAGR: 2.51/10 − 1 = 0.09596, or 9.60% a year.
- Check: 10,000 × 1.0959610 = 25,000.
- With 2% inflation the real return is 1.09596 / 1.02 − 1 = 7.45% a year.
With monthly deposits
If you added money along the way, comparing the end value with the starting value overstates the return. In this mode the calculator finds the yearly rate at which your starting amount and every monthly deposit, each growing from the month it was made, add up to the end value. Deposits are assumed to be equal and made at the end of each month.
What this calculator does not include
- The path along the way. Two investments with the same CAGR can have very different ups and downs.
- Tax, fees and dividends you took out. Enter the end value after costs to see your net return.
- Irregular deposits or withdrawals. The deposit mode assumes the same amount every month.
- Any forecast. A past return says nothing certain about future returns.
Amounts are rounded for display only; the calculation itself is not rounded. Results are estimates for information, not financial advice. Last updated: 12 November 2026.
Frequently asked questions
What is CAGR?
CAGR stands for compound annual growth rate. It is the single yearly rate that would turn the starting value into the end value over the period, with growth compounding each year.
Why is CAGR lower than the average of the yearly returns?
Because losses weigh more than gains. A fall of 50% needs a rise of 100% to recover. CAGR reflects what your money actually did; a simple average does not.
How is the return worked out when I add money every month?
The calculator searches for the yearly rate at which your starting amount plus all monthly deposits would grow to the end value. This is a money-weighted return, which takes into account when each deposit was made.
What is the real return?
The real return is the return after inflation. It shows how much your purchasing power grew. With a 7% return and 2% inflation the real return is about 4.9%, not 5%.
Can the return be negative?
Yes. If the end value is lower than the money you put in, the annualized return is negative.