WiseCalcs

Investment return calculator

Enter the initial value, the final value, and the number of years held. The calculator shows the total return, the annualized (compound) return, and the money gained.

Use it to see both the total and the yearly compound return on an investment.

USD
USD
years

Total return

60%

Annualized return
9.86%
Total gain
$6,000

The result updates as you type. The headline is the total return; the annualized figure shows the steady yearly rate, and the gain is in money.

How does it work?

Total return is the gain over the initial value. The annualized return is the steady yearly rate that compounds the start value to the end value. It ignores added contributions and taxes.

Investment return formula

annual=(VfVi)1/n−1\text{annual} = \left(\tfrac{V_f}{V_i}\right)^{1/n} - 1
V_i
Initial value of the investment.
V_f
Final value of the investment.
n
Holding period in years.
annual
Annualized (compound) return.

10,000 growing to 16,000 over 5 years is a 60% total return and about 9.86% a year compounded.

Method & sources

Total return is the gain divided by the initial value. The annualized return is the compound yearly rate over the period. Added contributions and withdrawals are not modelled.

Sources

Where this method comes from — use these references to understand the formula, assumptions, and limits.

How we calculate

  • Total return is the gain divided by the initial value.
  • The annualized return is the compound yearly rate over the period.
  • Added contributions and withdrawals are not modelled.
  • Returns are before taxes and fees.

Rounding

Percentages are shown to two decimals and money as whole units. The calculation uses full precision.

What this calculator does

A total return tells you how much an investment grew overall, but not how fast. This calculator gives both: the total return as a percentage of the starting value, and the annualized return — the constant yearly rate that would compound the start value to the end value.

How to use it

  1. Enter the initial value of the investment.
  2. Enter the final value.
  3. Enter the number of years held.
  4. Read the total return, annualized return, and gain.

A worked example

10,000 growing to 16,000 over 5 years is a 60% total return — but only about 9.86% a year compounded, because gains build on gains over time.

Total vs annualized

Total return is easy to read but hides time. Annualized return lets you compare investments held for different periods on equal footing — a 60% gain over five years is very different from 60% in one.

Common mistakes

  • Comparing total returns over different time periods.
  • Forgetting that contributions and withdrawals change the picture.
  • Ignoring fees and taxes, which reduce real returns.

When it's useful

Reviewing how an investment performed, comparing two holdings fairly, or checking whether a return beat a benchmark or inflation.

FAQ

What's the difference between total and annualized return?
Total return is the overall percentage gain. Annualized return is the steady yearly rate that compounds to that gain over the holding period.
How is the annualized return calculated?
Divide the final value by the initial value, raise it to the power of one over the years, subtract one, and express as a percentage.
Does it include contributions?
No. It compares a single start and end value. Regular contributions need a money-weighted return instead.
Are taxes and fees included?
No. Returns are before tax and fees, which reduce what you actually keep.
Can the return be negative?
Yes. If the final value is below the initial value, both the total and annualized returns are negative.
Can I share a calculation?
Yes. Use Share to copy a link that reopens the calculator with the same values and years.

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