Annualized Return Calculator
Enter your total percentage return over a period and the number of years to calculate the annualized (yearly) return rate.
Annualized Return Calculator
Convert a total return over multiple years into an equivalent constant annual growth rate.
A total return over several years isn't the same as that return happening every single year, since gains compound. This calculator finds the constant annual rate that, compounded over your holding period, produces the same total return.
Example
- With the default values shown above, this calculator returns: Annualized Return ≈ 8.45.
Frequently Asked Questions
What is the formula?
Annualized Return = ((1 + Total Return)^(1 ÷ Years) − 1) × 100 — the constant yearly rate that would compound to the same total return.
How is this different from just dividing the total return by the number of years?
Simply dividing ignores compounding. Annualizing correctly accounts for the fact that returns compound on top of each other year after year, giving a lower (and more accurate) rate than a straight-line average for the same total gain.