Annualized Return Calculator
Convert a total return over any period into an equivalent annual rate.
Please note: For information only, not investment advice. Projections assume constant rates; real markets fluctuate and capital is at risk.
What the Annualized Return Calculator does
Annualising converts a return earned over any period into the constant yearly rate that would produce the same result. It is the only fair way to compare investments held for different lengths of time.
Formula
Years = Days ÷ 365Annualized return = (Final ÷ Initial)^(1 ÷ Years) − 1
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Input method | one of 2 options | Yes | — |
| Initial value | selected currency | In some modes | Accepts more than 0. Shown Input method is Start and end values. |
| Final value | selected currency | In some modes | Accepts more than 0. Shown Input method is Start and end values. |
| Total return over the period | % | In some modes | Shown Input method is Total return percentage. |
| Holding period | days | Yes | Accepts 1 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Input method and Currency.
- Enter Holding period.
- Fill in the remaining inputs the form shows for your choice.
- Select Calculate.
Worked example
An investment grows from $10,000 to $13,200 over 500 days.
- Initial
- 10000
- Final
- 13200
- Days
- 500
1.32^(365/500) − 1 = 22.5% annualised, from a 32% total return.
Frequently asked questions
Why does a short period annualise to such a large number?
Because it assumes the same rate repeats all year, compounding each time. Short-period annualisation is mathematically valid but rarely a sensible forecast.
Is annualised return the same as CAGR?
Yes, for a single lump sum with no cash flows in or out. When money is added or withdrawn, use IRR instead.
Method and sources
Method. The constant annual rate that would take the starting value to the ending value over the period — a geometric mean, not an average of yearly returns.
Assumptions
- The period is measured accurately, and no money entered or left the investment during it.
- Returns compound at the stated frequency.
Limitations
- An annualised figure describes a smooth path that did not happen. It says what rate would have produced the same endpoint, not what any individual year returned.
- Over short periods, annualising exaggerates: a 5% gain in a month annualises to about 80%, which is arithmetic rather than a forecast.