Returns & Compounding Calculators

Returns & CAGR Calculator

Instantly convert period returns into annualized returns (CAGR), and annual returns into period returns.

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Compound annual growth rate (CAGR)

How to use

Compare returns on the same basis

50% over 3 years or 80% over 5 years: which is the better performance? Annualize them and you can compare right away.

By amount
Enter the starting and ending amounts and the period to calculate total return and CAGR.
Period → annualized
Converts the cumulative return of a fund or stock into an annual average.
Annual → period
Calculates the total return, in %, if an annual return continues for N years.

Formulas

CAGR = (ending amount / starting amount)^(1 / years) − 1 Period return = (1 + annual return)^years − 1

CAGR ignores the ups and downs in between and converts the result into 'what if it rose by this much every year'. Even with the same CAGR, the volatility (drawdowns) along the way can differ.

FAQ

Why does CAGR differ from a simple annual average?

If 100 gains 50% in year one and loses 50% in year two, it becomes 75. The simple average is 0%, but the CAGR is about −13.4%. Because of compounding, CAGR shows actual performance more accurately.

Can I annualize periods shorter than one year?

The calculation works, but annualizing a short period easily exaggerates results. Annualizing 10% over 3 months gives 46%, but there is no guarantee that return continues for a whole year.

Can I use CAGR for the return on regular (DCA) investing?

With regular contributions, money goes in at different times, so IRR (internal rate of return) is the accurate measure. The DCA Calculator shows IRR as well.

Results are estimates based on your inputs and simplified assumptions, and are for reference only, not a basis for investment decisions.