Annual Return on Investment Calculator
Compute annualized returns from investment data including dividends, capital gains, and time periods for comprehensive portfolio performance analysis.
Compound Annual Growth Rate (CAGR)
8.71%
Most accurate for growth investments
Annualized Total Return
8.71%
Includes all returns and contributions
Annual Dividend Yield
2.50%
Income from dividends only
Detailed Analysis
Simple Annual Return:10.00%
Money-Weighted Return:8.33%
Capital Appreciation Rate:7.50%
Investment Period:2.0 years
Total Return:$2,000.00
Total Return %:18.18%
Average Investment:$12,000.00
Annual Dividends:$250.00
Performance Benchmarks
Conservative Portfolio
4-6% annual return
Bonds, CDs, Savings
Moderate Portfolio
6-8% annual return
Mixed stocks and bonds
Aggressive Portfolio
8-12% annual return
Growth stocks, emerging markets
Understanding Annual Returns on Investment
Annual Return on Investment measures how much your investment has grown or declined each year on average. This is crucial for comparing different investments and understanding portfolio performance over time.
Key Metrics Explained:
- CAGR (Compound Annual Growth Rate): The most accurate measure for investments that compound over time
- Annualized Total Return: Includes all income sources (dividends, interest, capital gains)
- Simple Annual Return: Basic calculation without compounding effects
- Money-Weighted Return: Accounts for the timing of cash flows
- Dividend Yield: Annual income from dividends as a percentage of initial investment
Why This Matters:
- Performance Comparison: Compare different investments on an equal footing
- Goal Planning: Determine if you're on track for financial goals
- Risk Assessment: Higher returns often come with higher volatility
- Tax Planning: Understand the difference between capital gains and dividend income
- Portfolio Rebalancing: Identify over/under-performing assets
Pro Tips:
- Use CAGR for long-term growth investments and assets that reinvest returns
- Include all costs (fees, taxes, commissions) for accurate return calculations
- Consider inflation-adjusted returns for real purchasing power analysis
- Track money-weighted returns if you make regular contributions or withdrawals
- Compare your returns to relevant benchmarks (S&P 500, bond indices, etc.)