Annualized Return Calculator

Enter your investment's beginning value, ending value, and holding period to calculate the compounded annual growth rate (CAGR), total return, growth multiple, and equivalent monthly return.

Created by Luis GonzalezLast updated: June 12, 2026

How to Use This Calculator

1
Enter Beginning & Ending Values
Input the initial investment amount and its current or final value. Use the holding period field for the number of years held (decimals like 3.5 work for partial years).
2
Review CAGR & Insights
Click Calculate to see the annualized return (CAGR), total return percentage, and equivalent monthly return — plus insights on doubling time, real return, and growth multiple.

Example Calculation

An investor put $50,000 into a diversified ETF portfolio in 2022 and it's now worth $78,000 after 4 years. They want to know the annualized growth rate.

Beginning Value ($)

50,000

Ending Value ($)

78,000

Holding Period (years)

Results

Annualized Return (CAGR)

11.76%

Total Return

56.00%

Equivalent Monthly Return

0.931%

Insights card shows 1.

Tips

Compare Investments Across Timeframes

A stock gaining 30% in 2 years (14.02% CAGR) outperforms a fund gaining 50% in 5 years (8.45% CAGR) on an annualized basis, despite the lower total return. Always use CAGR for fair comparison.

Check Your Monthly Equivalent

The equivalent monthly return shows what monthly rate compounds to the same annual result. At 11.76% CAGR, that's 0.931%/month — useful for comparing against monthly-reporting investments like CDs or savings accounts.

Account for Inflation

An 11.76% nominal CAGR with ~3% inflation delivers 8.76% real growth. For retirement planning, use real returns to ensure your savings target accounts for rising costs over decades.

The Annualized Return Calculator computes the Compound Annual Growth Rate (CAGR) — the smoothed annual return connecting your investment's start and end values. Enter the beginning value, ending value, and holding period to see the CAGR, total cumulative return, and equivalent monthly rate, plus insights on growth multiples, doubling time, and real returns after inflation. In 2026, with the S&P 500's long-term average at ~10% and bonds yielding 4-5%, CAGR remains the standard benchmark for comparing investment performance across asset classes and time periods.

The CAGR Formula

CAGR answers: "What constant annual rate would have produced this result?"

CAGR = ((Ending Value / Beginning Value)^(1 / Years) - 1) x 100

For $50,000 growing to $78,000 over 4 years: (78,000/50,000)^(1/4) - 1 = 11.76%. Unlike total return (56%), CAGR accounts for the time dimension, making it comparable across different investments and holding periods.

💡 To analyze individual stock performance contributing to your portfolio's CAGR, use our Stock Calculator for per-share gain/loss analysis.

ETF Portfolio Growth: A 4-Year Review

An investor put $50,000 into a diversified ETF portfolio in 2022. After 4 years, it's worth $78,000. Using the calculator:

Annualized Return (CAGR): 11.76% — above the S&P 500's long-term average, indicating strong performance
Total Return: 56.00% — the cumulative $28,000 gain as a percentage
Equivalent Monthly Return: 0.931% — the monthly rate that compounds to 11.76% annually

The insights panel reveals a 1.560x growth multiple (every $1 became $1.56), a 6.1-year doubling time at this rate (faster than the S&P average of ~7.2 years), and an 8.76% real return after subtracting ~3% inflation.

💡 To assess the risk alongside your returns, our Stock Beta Calculator measures how volatile an asset is compared to the broader market.

Why Time Horizon Changes Everything

The same total return means very different things depending on holding period:

Scenario	Total Return	CAGR	Doubling Time
30% gain in 2 years	30%	14.02%	5.1 yrs
50% gain in 5 years	50%	8.45%	8.5 yrs
56% gain in 4 years	56%	11.76%	6.1 yrs
100% gain in 10 years	100%	7.18%	10.0 yrs

A 30% total return achieved in 2 years (14.02% CAGR) represents much better performance than a 50% total return over 5 years (8.45% CAGR). This is why total return alone is misleading — CAGR normalizes for time and makes every comparison fair.

When CAGR Doesn't Work

CAGR assumes a single lump-sum investment with no intermediate cash flows. If you're adding money regularly (like 401(k) contributions) or making withdrawals, CAGR will be inaccurate. For those scenarios, use Internal Rate of Return (IRR), which weights each cash flow by its timing. CAGR also masks volatility — a 12% CAGR could include years of -20% and +40%. For risk-adjusted assessment, pair CAGR with standard deviation or Sharpe ratio to understand whether the returns justified the ride.

Frequently Asked Questions

What is annualized return (CAGR)?

CAGR (Compound Annual Growth Rate) is the smoothed annual return that connects your starting and ending investment values. It assumes profits are reinvested and shows what constant growth rate would produce the same result. $50,000 growing to $78,000 over 4 years has an 11.76% CAGR — meaning it behaved as if it grew at exactly 11.76% each year, even though actual yearly returns varied.

How is CAGR different from total return?

Total return shows the cumulative gain (56% for $50K→$78K), but doesn't account for time. CAGR normalizes to an annual rate (11.76%), making it comparable across different holding periods. A 100% total return over 2 years (41.42% CAGR) is far better than 100% over 10 years (7.18% CAGR) — only CAGR reveals this.

Does CAGR work for investments with deposits or withdrawals?

No. CAGR assumes a single lump sum at the start and no intermediate cash flows. If you made additional deposits or withdrawals during the period, use IRR (Internal Rate of Return) or the Modified Dietz method instead. CAGR will overstate or understate performance when cash flows are significant.

What's a good annualized return in 2026?

The S&P 500 averages ~10% nominal CAGR over long periods (~7% after inflation). Bonds typically deliver 4-5%, real estate 6-8%. A CAGR above 10% for equities is strong, above 15% is exceptional. Always compare against the benchmark that matches your asset class — beating bonds with a stock portfolio isn't meaningful.

Why does the calculator show a monthly equivalent return?

The monthly equivalent converts the annual CAGR into a per-month rate that compounds to the same result. At 11.76% annual, that's 0.931%/month. This is useful for comparing against monthly-reporting investments (savings accounts, CDs, money market funds) or for estimating month-to-month expected growth on your portfolio.