Annualized Rate of Return Calculator
Results are estimates based on the values you enter. Recheck your inputs and assumptions before using the output for decisions.
Calculate annualized rate of return from beginning value, ending value, and holding period.
Annualized Rate of Return Calculator
Free online annualized rate of return calculator to measure the yearly investment return implied by a beginning value, ending value, and holding period. This calculator is useful for investors, finance students, portfolio reviewers, advisors, business owners, and anyone who wants to compare investment performance across different time spans on a consistent yearly basis. A simple total return can be misleading when one investment was held for one year and another was held for five years. Annualized return solves that problem by converting the overall growth into an equivalent yearly rate, making comparisons easier and more meaningful.
This page uses three core investment inputs. Beginning value means the starting amount invested or the initial value of the asset. Ending value means the value at the end of the holding period after gains or losses. Holding period in years means how long the investment was held. Once those values are entered, the calculator shows annualized rate of return, total return, growth multiple, and ending value per $100 invested. These outputs are useful because they let you view the same result in multiple ways. Some users prefer a yearly percentage, some want the total percentage gain, and some want to know how much every $100 grew over the period.
The formula of annualized rate of return
Growth multiple = Ending value / Beginning value
Total return = Growth multiple – 1
Annualized rate of return = (Growth multiple ^ (1 / Years)) – 1
Ending value per $100 invested = Growth multiple x 100
Here beginning value means the amount at the start of the investment, ending value means the amount at the end of the investment period, growth multiple means how many times the initial value became over the full holding period, total return means the overall percentage gain or loss across the whole period, annualized rate of return means the equivalent yearly compounded rate, and ending value per $100 invested shows how much each $100 would be worth by the end of the holding period.
Solved Example
Example 1: Find the annualized rate of return if beginning value is $10,000, ending value is $12,500, and holding period is 3 years.
Solve: Growth multiple = 12500 / 10000 = 1.25
Total return = 1.25 – 1 = 0.25 = 25%
Annualized rate of return = (1.25 ^ (1 / 3)) – 1 = 0.0772 = 7.72%
Ending value per $100 invested = 1.25 x 100 = $125
Example 2: Find the result if beginning value is $5,000, ending value is $6,800, and holding period is 4 years.
Solve: Growth multiple = 6800 / 5000 = 1.36
Total return = 1.36 – 1 = 0.36 = 36%
Annualized rate of return = (1.36 ^ (1 / 4)) – 1 = 0.0800 = 8.00%
Ending value per $100 invested = 1.36 x 100 = $136
Example 3: Find the result if beginning value is $20,000, ending value is $18,000, and holding period is 2 years.
Solve: Growth multiple = 18000 / 20000 = 0.90
Total return = 0.90 – 1 = -0.10 = -10%
Annualized rate of return = (0.90 ^ (1 / 2)) – 1 = -0.0513 = -5.13%
Ending value per $100 invested = 0.90 x 100 = $90
Table of annualized rate of return calculator
| Beginning Value | Ending Value | Years | Total Return | Annualized Return |
|---|---|---|---|---|
| $5,000 | $6,800 | 4 | 36.00% | 8.00% |
| $10,000 | $12,500 | 3 | 25.00% | 7.72% |
| $15,000 | $21,000 | 5 | 40.00% | 6.96% |
| $20,000 | $18,000 | 2 | -10.00% | -5.13% |
How to use this annualized rate of return calculator
Enter the beginning value in the proper input field. After that, enter the ending value of the same investment and then enter the holding period in years. Make sure the values belong to the same investment period and that the holding period is greater than zero. Then click the calculate button. The calculator will show annualized rate of return, total return, growth multiple, and ending value per $100 invested in the result box.
This calculator is useful when comparing investments with different holding periods. A fund that earned 20% over two years and an asset that earned 20% over five years are not equally strong performers. Annualizing the return shows which one actually grew faster on a yearly basis. It also helps when reviewing stocks, mutual funds, private investments, property deals, or business projects where the start and end values are known but the performance needs to be normalized into a yearly rate. Looking at growth multiple beside total return also gives a simple intuitive view of how many times the investment increased or decreased.
When using the result, remember that annualized return is a smoothing measure. It does not show volatility, timing of cash flows, dividends taken out, or the exact path the investment followed between start and end. It is best used as a comparison tool, not as a full risk analysis. Even so, annualized rate of return remains one of the most practical investment summary metrics because it expresses performance in a consistent yearly language. This calculator gives a fast numerical view that supports portfolio review, investment comparison, performance reporting, and return analysis.