Average Return Calculator
Arithmetic mean of periodic returns.
Inputs
Result
Average Return6.00%
Periods5
About the Average Return Calculator
The Average Return Calculator computes the compound annual growth rate (CAGR) of an investment from its starting value, ending value, and holding period.
Calculation method
CAGR is the constant annual rate that would grow the starting value into the ending value over the period.
CAGR = (End / Start)^(1/Years) − 1How to use this calculator
- Enter the starting value of the investment.
- Enter the ending value.
- Enter the number of years held.
Example
An investment grown from $10,000 to $18,000 over 8 years has a CAGR of about 7.6%.
Frequently asked questions
Is average return the same as CAGR?
No. Arithmetic average return can be misleading because of volatility. CAGR is the true annualized growth and is what investors compare.
Does this include dividends?
Only if you use total-return values (with dividends reinvested) for the starting and ending amounts.
How does CAGR handle contributions?
It does not. If you added money over time, use IRR (internal rate of return) instead for an accurate result.
Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional for decisions specific to your situation.