Finance tools
Rate of return calculator
Free rate of return calculator and annualized return calculator for investments and savings. Enter beginning and ending balances plus your holding period in Simple return, or add level deposits or withdrawals in With contributions. See live total return %, annual rate of return, a formula reference, and CSV/PDF export — no signup and no submit button.
What is rate of return?
Rate of return is the gain or loss on an investment over a period, expressed as a percentage of what you started with. For holdings longer than a year, investors usually quote an annualized rate of return (a constant yearly rate) so a six-month result can be compared fairly to a decade-long track record.
Use this investment return calculator when you know a beginning balance, an ending balance, and how long you held the position — and you want the implied constant annual rate. It is not a forward projection (“what if I earn 8% for 20 years?”). For that scenario, try our compound interest calculator or future value calculator.
Pick Simple return when nothing was added or withdrawn between start and end. Pick With contributions when you saved or withdrew the same amount on a regular schedule — the same idea as Excel RATE with a payment, or IRR on a level cash-flow schedule.
Simple return
Beginning, ending, and period → total return % and annualized rate.
With contributions
Level deposits or withdrawals with frequency and payment timing.
Period by length or dates
Years plus optional months/days, or start/end dates in the advanced panel.
CSV/PDF export
Download inputs and results without a signup wall.
Who uses this calculator?
Individual investors reconciling brokerage statements, savers tracking 401(k) or IRA balances, and anyone sanity-checking portfolio performance — whenever you have start and end values (and maybe steady contributions), not when you need a market projection or a fund fee breakdown.
Related tools: CAGR calculator, ROI calculator, stock average calculator (average cost per share before you measure return), P/E ratio calculator (valuation multiple before return math), compound interest calculator, future value calculator, mutual fund calculator, and NPV calculator.
Annualized return calculator
An annualized return calculator answers a common question: “What did I earn per year on average?” — not just the total gain over the whole period. That single yearly figure lets you compare a three-year trade to a ten-year retirement account on equal footing.
The results panel shows your annualized rate of return as you type. In Simple return mode, it is the geometric average between beginning and ending values (the same core math as CAGR). In With contributions mode, it is the money-weighted annual rate that matches your deposit or withdrawal schedule.
Do not annualize by dividing total return by years — that shortcut overstates performance when compounding matters. Use the annualized result here or the formula in the next section instead.
Simple return vs with contributions
Choose the mode that matches how money actually moved. If you only have a start value and an end value — no deposits or withdrawals in between — use Simple return. The math is the same family as CAGR between two endpoints.
Use With contributions when you regularly added to (or withdrew from) the account: 401(k) contributions, monthly savings, or fixed withdrawals in retirement. Enter the periodic amount, frequency (weekly through annual), and whether payments hit at the beginning or end of each period. The calculator solves the annualized rate that reconciles all flows to your ending balance.
Monthly or biweekly savings: choose that frequency instead of one annual deposit — $100/month is not the same as $1,200/year for timing inside the solver. The hero still shows an annualized % (not a monthly rate). For bank APY on savings products, see our APY calculator.
| Situation | Mode | What you get |
|---|---|---|
| Lump sum grew from $10k to $18k over 7 years | Simple return | Total return % + annualized rate (≈8.6%/yr) |
| $1k start, $100/year added for 10 years, $5k ending | With contributions | Money-weighted annualized rate (≈12.4%/yr) |
| Unequal amounts on random dates | Spreadsheet or NPV tool | Use XIRR in Excel or our NPV calculator for irregular project streams |
Try the scenario presets
In the calculator, use Simple $1k → $2k (5y) or Contributions ($1k + $100/yr) to load worked examples that match the numbers below — then adjust for your portfolio.
For uneven project cash flows by year, use the NPV calculator instead of contributions mode here.
Rate of return formula
The rate of return formula for a single beginning and ending value over n years has two common views:
Simple and annualized formulas
Total return % = (Ending − Beginning) ÷ Beginning × 100
Annualized rate = (Ending ÷ Beginning)1/n − 1 (n = years)
Multiply the annualized decimal by 100 for a percentage. Fractional years use the same exponent when you add months or days to the period.
To calculate annualized rate of return step by step:
1. Divide ending value by beginning value.
2. Raise the result to the power of 1 ÷ n (years, including fractions).
3. Subtract 1 and multiply by 100 for a percentage.
Example: $1,000 → $2,000 over 5 years → total return 100%, annualized rate ≈ 14.87% per year (the constant rate that doubles the balance in five years).
When you have periodic deposits or withdrawals, there is no single closed-form rate — the tool builds a monthly cash-flow schedule and solves the annualized return (similar to Excel RATE with a payment argument, or IRR on a regular schedule).
Total return vs annualized rate of return
Total return is the whole-period gain or loss on your starting balance (Simple mode shows it explicitly). Annualized rate of return spreads that performance across years as one constant yearly rate — what you need when someone asks “what did I earn per year on average?”
| Measure | Formula | $1,000 → $1,300 over 3 years |
|---|---|---|
| Total return % | (FV − PV) ÷ PV × 100 | 30.00% over the full period |
| Annualized rate | (FV ÷ PV)<sup>1/n</sup> − 1 | ≈9.14% per year (compounded path) |
| Wrong shortcut | Total return ÷ years | 10% per year — overstates vs true annualized |
One-year holdings are the easy case: $1,000 → $1,100 in 12 months → 10% total and 10% annualized. Over longer windows, total return and annualized rate diverge — use both rows in Simple mode when you report results.
Worked examples
One-year gain
$1,000 → $1,100 in 1 year → 10% total and annualized (same when n = 1).
Simple doubling (5y)
$1,000 → $2,000 in 5 years → 100% total, ≈14.87% annualized — use the Simple preset.
Contributions (10y)
$1k + $100/yr end → $5k ending → ≈12.38% annualized — contributions preset.
Benchmark context
Compare your solved rate to your goals or long-run index averages — context only, not a forecast of future returns.
Withdrawals: $40,000 initial balance, withdraw $5,000 per year for 10 years, ending value $0 → enter a negative periodic amount; the solver returns the annualized rate implied by that decumulation path (signs must stay consistent).
All figures are nominal (before inflation and taxes). For purchasing-power context, pair results with our inflation calculator. Fund-specific loads and expense ratios belong on the mutual fund calculator.
Rate of return vs ROI vs CAGR
These terms overlap in everyday conversation, but each calculator on Ordio is tuned to a slightly different question:
| Measure | Typical question | Ordio tool |
|---|---|---|
| Rate of return (this page) | What annualized return fits my start/end (and maybe level PMTs)? | Rate of return calculator |
| ROI % | What was total gain on amount invested (often one headline %)? | ROI calculator |
| CAGR | What is CAGR between two endpoints, or project FV from a CAGR %? | CAGR calculator |
| Mutual fund net return | How do loads and expense ratio affect fund IRR on contributions? | Mutual fund calculator |
Between two values with no interim flows, CAGR and a simple annualized rate of return use the same formula. Stay on this calculator when you want rate of return wording, total return % in Simple mode, or level contributions in one place.
Switch tools when the question changes: ROI calculator for total return on cost and marketing scenarios; CAGR calculator for CAGR labeling, a growth chart, and projecting future value from a target CAGR; compound interest calculator when you assume a forward rate instead of solving it from balances.
Excel and irregular cash flows
Excel’s RATE function solves the same family of problems as this calculator when cash flows follow a regular schedule.
Excel RATE sign convention
Lump sum, no interim flows: =RATE(n,0,-PV,FV) — n in years, PV = beginning (outflow), FV = ending (inflow).
Level deposits or withdrawals: =RATE(n,pmt,-PV,FV) — keep pmt and PV/FV signs consistent (deposits often negative pmt when PV is your opening investment).
If Excel returns #NUM!, check that FV and payment signs allow a real rate — the same constraints apply here.
For irregular dates and amounts, use Excel XIRR — this page supports regular schedules only. Uneven capital-budgeting streams fit better on our NPV calculator.
To project a future balance at a fixed return rate (instead of solving the rate backward from balances), use the compound interest calculator or future value calculator.
Limitations and disclaimer
Annualized return smooths volatility — it does not show drawdowns, sequence-of-returns risk, or year-by-year performance. Two portfolios with the same start/end values can have very different paths. Results ignore taxes, fees, and inflation unless you adjust inputs manually (reduce ending value for fees; use the inflation calculator for real-return context).
Educational resources such as Investor.gov explain compound growth and long-term investing concepts; they do not replace personalized advice.
Outputs here are illustrative estimates for planning and education only — not investment, tax, or legal advice.
How to use this calculator
Choose Simple or With contributions
Simple mode for beginning value, ending value, and period only. Contributions mode adds a level deposit or withdrawal — set frequency (weekly through annual) and whether each payment is at the period beginning or end.
Set the investment period
Enter years plus optional months and days in the advanced panel, or switch to start and end dates for statement-style ranges. The period must be greater than zero; very short windows trigger a short-period notice on annualized results.
Read total and annualized results
Simple mode shows total return % and annualized rate of return % in the results hero, plus absolute change and period length. Contributions mode focuses on the money-weighted annualized rate and total periodic cash flow.
Export or copy
Use CSV or PDF export for spreadsheets or records. Copy the summary line from the results panel to paste into emails or notes — exports include the finance disclaimer.
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Frequently asked questions about rate of return and annualized return
What is a rate of return?
A rate of return is the gain or loss on an investment over a period, usually shown as a percentage. For periods longer than one year, an annualized or yearly rate of return expresses that result as one constant rate per year so different holding lengths compare fairly.
How do you calculate the rate of return?
Divide ending value by beginning value, raise the ratio to the power 1 ÷ n (years), subtract 1, and multiply by 100 for an annualized percentage. Total return without annualizing is (Ending − Beginning) ÷ Beginning × 100. Example: $1,000 to $2,000 over 5 years → 100% total, ≈14.87% annualized.
How do I calculate annualized rate of return?
Enter your beginning value, ending value, and holding period in Simple return mode. The calculator applies (Ending ÷ Beginning)1/n − 1 automatically — the same math as an annual rate of return calculator between two endpoints.
What is the rate of return formula?
The rate of return formula has two common forms: total return % = (FV − PV) ÷ PV × 100 and annualized rate = (FV ÷ PV)1/n − 1 with n in years. The formula card in the calculator mirrors these while you edit inputs.
How do I calculate rate of return with contributions?
Switch to With contributions, enter initial and final values, periodic deposit or withdrawal, frequency, and timing. Example: $1,000 start, $100/year for 10 years, $5,000 ending → ≈12.38% annualized. The tool solves the money-weighted rate that matches those flows.
What is the difference between rate of return and ROI?
ROI is usually total gain divided by amount invested (one headline %). Rate of return here emphasizes the annualized yearly rate and supports contribution schedules. Use the ROI calculator for ROI %, marketing examples, and a required-return solver.
What is the difference between rate of return and CAGR?
With only a start and end value, they use the same annualized formula. The CAGR calculator emphasizes CAGR labeling, a growth chart, and projecting future value from a target CAGR; this calculator adds level contributions and total return % in Simple mode.
What is a good annualized rate of return?
There is no single “good” number — it depends on risk, asset mix, and your benchmark. Over a 10-year horizon, diversified stock-and-bond portfolios are often discussed in the high single digits to low teens before fees and inflation; that is context, not a forecast. Compare your calculated rate to your plan’s assumptions and risk tolerance rather than headline ROI quotes from unrelated assets.
What is nominal vs real rate of return?
Nominal return is before inflation. To calculate the real rate of return, adjust for inflation over the same period — often approximated as (1 + nominal) ÷ (1 + inflation) − 1. Use our inflation calculator for purchasing-power context; inputs and outputs here are nominal unless you adjust balances yourself.
How do I calculate rate of return in Excel?
No interim flows: =RATE(n,0,-PV,FV). Level flows: =RATE(n,pmt,-PV,FV) with consistent signs. Irregular flows: =XIRR(values,dates). This calculator matches the first two patterns; use XIRR or our NPV calculator for uneven schedules.
What is the difference between rate of return and IRR?
IRR is the discount rate that zeros NPV for a cash-flow series. Contributions mode here solves the same idea for regular deposits or withdrawals. Irregular project flows belong on the NPV calculator.
Can I use this for mutual fund returns?
Yes, when you enter your own balances and a level contribution or withdrawal schedule. For sales loads, expense ratio, and fund-specific schedules, use the mutual fund calculator.
Why is my annualized rate negative?
A negative annualized rate means you lost money on a money-weighted basis — ending value (after flows) is below what you put in. Very short holding periods can produce extreme percentages; watch for the short-period notice when the window is under about one month.
Is this financial advice?
No. Results are illustrative estimates for education and planning only, not investment, tax, or legal advice.