Average Return Calculator: Measure Your Investment Growth
The **Average Return Calculator** (CAGR calculator) helps investors measure how fast their investments have grown annually — factoring in all deposits, withdrawals, and time duration. This is a crucial tool for investors, traders, and portfolio managers who want to assess their actual portfolio performance over time.
What is Average Annual Return (CAGR)?
CAGR or Compound Annual Growth Rate shows the smoothed annual growth rate of your investment over a specific period. It assumes that profits were reinvested at the end of each year.
Formula Used
CAGR = [(Ending Balance / Net Investment) ^ (1 / Number of Years)] - 1
Why This Calculator is Useful
- Includes deposits and withdrawals for realistic tracking.
- Provides long-term portfolio growth rate.
- Helps compare investment options (FDs, mutual funds, real estate).
- Ideal for SIP, mutual fund, or multi-year investors.
Example
Suppose you started with $5,600 on Jan 2022 and ended with $18,000 in Nov 2025. During this period, you deposited $5,000, withdrew $1,500, and made a few smaller contributions. The calculator computes an **average annual growth rate of around 34%**, showing strong portfolio performance.
Tips for Improving Investment Returns
- Invest consistently — time in the market beats timing the market.
- Reinvest dividends and interest income.
- Track withdrawals carefully to avoid return dilution.
- Use SIPs or auto-invest features to build long-term wealth.
FAQs
Q1: What’s the difference between CAGR and IRR?
CAGR assumes one lump-sum investment, while IRR accounts for multiple cash flows over time.
Q2: Can I use this for SIP or mutual funds?
Yes. Enter your SIP deposits as “Deposits” to get accurate CAGR results.
Q3: Is CAGR the same as ROI?
No. ROI shows total percentage gain, while CAGR shows annualized growth over time.
Conclusion
The Average Return Calculator simplifies investment analysis by providing a clear view of your annual growth rate. Whether you’re a stock investor, mutual fund holder, or business owner tracking portfolio performance, understanding CAGR helps you make smarter, data-driven financial decisions.