How this calculator works
Total return measures gain or loss against the original investment. Include dividends or sale proceeds in the returned amount only once. Annualization treats growth as compound growth over the elapsed days, using 365.25 days per model year. There are no interim cash flows in this model. Compare annualized figures when investment durations differ.
Formula
Total return = returned/invested - 1. Annualized return = (returned/invested)^(1/years) - 1. Years = ln(returned/invested)/ln(1 + annual return).
Worked example
$1,000 returned as $1,210 gives a 21% total return. Over exactly two model years its annualized return is 10%. A return of $800 from $1,000 is a 20% loss.
Advertisement
Frequently asked questions
Does returned amount include the principal?
Yes. Enter all proceeds including the recovered original capital, not just the profit.
Can I compare investments with different durations?
Yes. The second investment has its own holding period and annualized return.
What about additional deposits?
Use a cash-flow-aware rate-of-return or IRR calculator when money enters or leaves during the investment.