Investment return is the gain, including dividends received, divided by the amount invested. Annualized return spreads that over the holding period with compounding: (1 + total return)^(1/years) – 1. For example, $10,000 that grows to $20,000 in 10 years is a 100% total return, or about 7.18% a year.
Brokerage statements often show a gain in dollars, or a percentage since purchase, but rarely a yearly figure you can compare across holdings bought at different times. Enter what you paid, what the position is worth now or sold for, any cash dividends you took out, and how many years you held it. The calculator returns the total return, the compound annualized return, the dollar gain or loss and the growth multiple, with the working shown line by line. It treats the investment as one lump sum in and one value out; if you added or withdrew money along the way, the result is not a money-weighted return and will misstate your actual yearly performance.
Use the full cost, including commissions or purchase fees.
Use market value today, or sale proceeds after selling costs.
Dividends or distributions you did not reinvest. Leave reinvested amounts out, as they are already in the value.
Years held, in quarter-year steps; the annualized figure depends on it.
Result Total return: 100%
Annualized return: 7.18%
Gain or loss: $10,000.00
Ending value per $1 invested: 2
A 100% total return spread over a decade works out to about 7.18% a year, close to the 72 ÷ 10 = 7.2% shortcut.
Result Total return: 16%
Annualized return: 7.7%
Gain or loss: $800.00
Ending value per $1 invested: 1.16
Price growth of $600 and $200 of cash dividends give $800, a 16% total return, or about 7.70% a year.
Result Total return: -20%
Annualized return: -7.17%
Gain or loss: -$2,000.00
Ending value per $1 invested: 0.8
A 20% loss over three years is a compound decline of about 7.17% a year, not 6.67%.
Total return = (V_end + D - V_start) ÷ V_start; Annualized return = (1 + Total return)^(1/n) - 1
V_startV_endDnTotal return is the holding-period return: everything you got back minus what you put in, as a share of what you put in. The annualized figure is the constant yearly growth rate that would turn the starting amount into the ending amount over n years with compounding, which is why a 20% loss over three years is about -7.17% a year rather than -6.67%. Taxes and inflation are not deducted.
Total return is the whole gain over the period as a percentage of the cost. Annualized return is the steady yearly rate that compounds to that same total. A 100% gain over 10 years is about 7.18% a year, while the same 100% over 2 years is about 41.42% a year.
Each year's growth builds on the previous year's balance. Dividing 100% by 10 gives 10%, but 10% compounded for 10 years would turn $1 into about $2.59, not $2. The compound rate that produces exactly $2 is 7.18%.
Yes, if they were paid to you in cash, because they are part of what the investment returned. If they were reinvested into more shares, they are already counted in the current value, so enter zero in the income field to avoid counting them twice.
A current value below the cost gives a negative total and annualized return. A drop from $10,000 to $8,000 over three years is a -20% total return and about -7.17% a year. If the position is worth nothing, the annualized return is -100%.
No. The figures are nominal and pre-tax. To get a rough real return, subtract the average inflation rate over the period from the annualized figure, or deflate the ending value by the change in the consumer price index before entering it.
You can enter a fraction such as 0.5 years. The total return is still exact, but the annualized number assumes the same pace would continue for a full year, so a 10% gain in three months shows as about 46% a year. Read short-period annualized figures with caution.