Rate of Return Calculator

Total return is the overall percentage gain or loss over the entire period. Annualized return (CAGR) converts this to a per-year equivalent. A 100% total return over 10 years equals a 7.18% annual return.

Compound Annual Growth Rate (CAGR) is the rate at which an investment grows each year over a specified period, assuming profits are reinvested. It is the smoothed annual return and does not show year-to-year volatility.

The Rule of 72 estimates how long it takes to double money. Divide 72 by the annual return percentage. At 8% annual return, money doubles in 72/8 = 9 years. It is a quick mental math approximation.

Yes. Total return should always include dividends, interest, and other income distributions. Ignoring dividends understates performance. Dividend-paying stocks' total returns have historically exceeded price-only returns significantly.

Real return = nominal return minus inflation rate. If your investment earns 8% but inflation is 3%, your real return is approximately 5%. Real return matters more than nominal return for preserving purchasing power.

A benchmark is a standard, like the S&P 500, used to compare investment performance. If your portfolio returned 6% while the S&P 500 returned 10%, you underperformed. Consistent underperformance suggests passive index investing would be better.