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Finance Calc Kit
Investments

Rate of Return Calculator

Calculate total rate of return and compound annual growth rate (CAGR) on investments including dividends and cash income.

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How to calculate investment rate of return

Rate of return measures how much an investment grew or shrank over a holding period. This calculator combines your ending market value with dividends or other cash income to show both the total percentage return and the annualized compound growth rate (CAGR). All math runs in your browser. Nothing is sent to a server.

Enter your initial investment, current or ending value, any dividends received, and how many years you held the position. Results update as you type. To project future wealth from a target growth rate instead of measuring past performance, use the CAGR calculator. To model recurring contributions and compound growth over time, try the investment calculator.

Rate of return formulas

First, add dividends to the ending market value to get total accumulated value:

Total Value=Vf+D\text{Total Value} = V_f + D

The simple (total) rate of return expresses your net gain as a percentage of what you invested:

Simple RoR=(Vf+D)−ViVi×100\text{Simple RoR} = \frac{(V_f + D) - V_i}{V_i} \times 100

To compare investments held for different lengths of time, annualize the return using the compound annual growth rate:

Annualized RoR (CAGR)=(Vf+DVi)1n−1\text{Annualized RoR (CAGR)} = \left(\frac{V_f + D}{V_i}\right)^{\frac{1}{n}} - 1

Where V_i is the initial investment, V_f is the ending market value, D is dividends or cash income received, and n is the holding period in years.

Worked example

Suppose you invested $10,000 in a stock fund. After 3 years the shares are worth $15,000 and you received $500 in dividends along the way.

  1. Total value: $15,000 + $500 = $15,500
  2. Total gain: $15,500 - $10,000 = $5,500
  3. Simple rate of return: ($5,500 / $10,000) × 100 = 55%
  4. Annualized return (CAGR): ($15,500 / $10,000)^(1/3) - 1 ≈ 15.73% per year

The 55% figure is your total return over the full 3 years. The 15.73% CAGR is the steady yearly rate that would compound $10,000 into $15,500 over the same period.

Simple return vs annualized return

Simple rate of return answers: how much did I make in total, as a percentage of what I put in? Annualized rate of return answers: what constant yearly growth rate would produce the same ending wealth? Use simple return for a single holding period snapshot. Use annualized return when comparing a 3-year stock pick against a 7-year bond or a 10-year index fund.

Frequently asked questions

What is included in rate of return?
This calculator includes both capital appreciation (change in market value) and cash income such as dividends. Add the ending market value and dividends together before computing returns.
What is the difference between simple and annualized return?
Simple return is the total percentage gain over the entire holding period. Annualized return (CAGR) converts that total into an equivalent yearly compound growth rate, making it easier to compare investments held for different lengths of time.
Should I include reinvested dividends?
If dividends were reinvested and already increased your ending market value, enter $0 for dividends to avoid double counting. If dividends were paid out as cash, include them in the dividends field.
Can this calculator show a loss?
Yes. If your ending value plus dividends is less than your initial investment, the calculator shows a negative total return and negative annualized return.
Are the results stored?
No. Changing the fields only updates the page URL so you can copy and share your inputs.
Which currency is used?
Amounts are formatted in US dollars (USD).

Resources and references

The formulas and methods in this calculator were checked against these independent sources.