Finance
Calculator for yearly compounded return
Turn total growth during the time wey you hold investment into compound growth rate for each year.
Add to workspaceYour numbers
Result dey update as you type; no Calculate button dey. All calculation dey run inside your browser.
Compounded return for each year
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Summary
| Amount | |
|---|---|
| Total gain | — |
| Total return | — |
| Value wey remain for the end | — |
Compare start and end at a glance
Dem scale the bars against the bigger value. One growth rate no show the whole journey: steady growth and plenty ups and downs fit get the same yearly compounded rate.
Growth path if this yearly compounded rate stay the same
| Year | Value wey e get |
|---|
This path apply the same compounded rate every year. Na smooth illustration; e no be record of wetin really happen year by year.
Formula
Yearly compounded return = (final value ÷ initial value)1 ÷ years − 1. Total return = (final value − initial value) ÷ initial value.
Example wey show the calculation
If $10,000 wey you start with grow reach $15,000 inside 4 years: total gain na $5,000, total return na 50.00%, and yearly compounded return na (15,000 ÷ 10,000)1/4 − 1 = 10.67%. Na the steady yearly rate wey fit carry $10,000 reach $15,000 inside 4 years.
Where e fit work and limits
This smooth rate look back at wetin don happen. E assume say growth compound evenly, and e no explain price swings, fees, tax, inflation or money wey you add or remove during that time. You no fit compare am directly with simple average yearly return, and e no be forecast.
Questions wey people dey ask often
Na the same thing annualized return and average yearly return be?
No. Simple average of yearly returns dey ignore compounding. Annualized (compound) rate na the single steady rate wey dey reproduce total growth over the period.
Wetin if final value lower pass initial value?
Result negative, and e correct: negative annualized rate mean say value shrink at that steady yearly pace.
I fit use am for periods wey short pass one year?
Yes, enter years as fraction, like 0.5 for six months. But when you turn short period into yearly rate, short-term changes go look bigger, so use the result with care.
E dey include dividends or fees?
Only if dem already reflect for final value wey you enter. Reinvested dividends dey raise final value; fees paid out dey lower am.
Why e lower pass total return divide by years?
Because compounding dey do part of the work: 50% over 4 years na 10.67% compounded, not 12.50% a year, since each year growth also earn growth in later years.
Other tools wey relate to dis
- Calculator for compound interest — estimate growth when you dey add money regularly
- Calculator for ROI — simple return on money wey you invest
- Calculator for retirement savings — how savings fit grow over long time
Results na estimates; dem no replace advice from qualified professional.