Annualized Return Calculator

Use our free annualized return calculator to convert a total investment return into an annualized rate. Compare the performance of investments held for different time periods on an equal footing.

Financial

Currency

Beginning Value

Ending Value

Holding Period (years)

years

Formula

Annualized return is the geometric average amount of money earned by an investment each year over a given time period. It converts the total return into a consistent annual rate for easy comparison.

Annualized Return = (1 + Total Return)^(1/t) - 1

Percentage: The percentage value you want to apply

Number: The original number or value

Result: The calculated result

How It Works

1Enter the beginning value of your investment.
2Enter the ending value after the holding period.
3Enter the total holding period in years.
4The calculator computes the annualized return rate.

Examples

$10,000 to $20,000 over 3 years

1.Total Return = ($20,000 - $10,000) / $10,000 = 100%
2.Annualized = (1 + 1)^(1/3) - 1 = 25.99%

Result: 25.99%

Frequently Asked Questions

Annualized return is the geometric average return per year, showing what return you would need to earn each year to achieve the total return over the holding period.

Annualized return uses geometric averaging (compounding), while average return uses arithmetic averaging. Annualized return is more accurate for investment performance.

Annualizing returns allows you to compare investments with different holding periods on an equal yearly basis.

Related Calculators

CAGR Calculator ROI Calculator Total Return Calculator Investment Calculator Tip Calculator Discount Calculator

Annualized Return Guide

CalculateMe Team

Last updated: 2026-07-15

Frequently Asked Questions

Annualized return is the geometric average return per year, showing what return you would need to earn each year to achieve the total return over the holding period.

Annualized return uses geometric averaging (compounding), while average return uses arithmetic averaging. Annualized return is more accurate for investment performance.

Annualizing returns allows you to compare investments with different holding periods on an equal yearly basis.

Annualized Return Calculator

Formula

How It Works

Examples

$10,000 to $20,000 over 3 years

Frequently Asked Questions

What is annualized return?

How is annualized return different from average return?

Why annualize returns?

Related Calculators

Related Articles

Annualized Return Calculator

Formula

How It Works

Examples

$10,000 to $20,000 over 3 years

Frequently Asked Questions

What is annualized return?

How is annualized return different from average return?

Why annualize returns?

Related Calculators

Related Articles