Annualized Return Calculator
Annualized return converts total investment returns into an equivalent annual rate, making it easy to compare investments held for different periods. Enter your starting value, ending value, and holding period. The calculator shows annualized return, total return, and annualized percentage.
Annualized return formula
Annualized Return = ((Ending Value / Starting Value) ^ (1 / Years)) - 1
Total Return = ((Ending Value - Starting Value) / Starting Value) × 100%
How to use this calculator
- Enter your starting investment value in "Starting value".
- Enter the current or ending value in "Ending value".
- Enter the time you held the investment in "Holding period (years)".
- The calculator shows total and annualized returns.
Using holding periods other than years
To calculate for months: enter holding period as months / 12 (e.g., 6 months becomes 0.5 years). To calculate for days: use days / 365.
Annualized return calculator: frequently asked questions
What is annualized return?
Annualized return is the average yearly return on an investment, calculated so that you can compare investments with different holding periods fairly.
How is it calculated?
Annualized return = ((Ending Value / Starting Value) ^ (1 / number of years)) - 1. It compounds the total return over years.
Is it the same as total return?
No. Total return shows profit as a percentage but does not account for time. Annualized return shows the equivalent annual return, making it easier to compare investments.
Can I use months or days instead of years?
Yes. For months: use (Ending/Starting)^(12/number of months) - 1. For days: use (Ending/Starting)^(365/number of days) - 1.
What if the holding period is less than one year?
The annualized return will be higher than the actual return. For short holding periods (less than a year), simple return might be more intuitive.
Official sources
- U.S. Securities and Exchange Commission: Investor Education.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.