A pure capital gain
An investment rising from 10,000 to 12,100 over two years, with no cash income or additional fees, has a 21% total return and a 10% compound annualized return.
Measure a completed investment scenario with one initial investment, an ending value, and separately received income. Annualization treats the net proceeds as received at the end.
USD 4,400.00Net gain / loss
44.0000%Total return
7.5654%Annualized nominal return
5.4563%Annualized real return
Net proceeds in initial purchasing power
USD 13,042.52
Nominal net proceeds: USD 14,400.00.
Total return = (ending value + cash income − additional fees − initial investment) ÷ initial investment. Annualized return = (net proceeds ÷ initial investment)^(1 ÷ years) − 1. Real annual return = (1 + nominal annual return) ÷ (1 + inflation) − 1.
Do not add reinvested distributions again if included in the ending value, or subtract fees already reflected there. This is not IRR or a time-weighted return; intermediate contributions, withdrawals, and the timing of cash distributions require a different calculation. No tax rules or future returns are inferred.
Your inputs and calculations stay in this browser. No live financial data is fetched; amounts use your selected USD or GBP labels.
How to use the Investment Return Calculator
- 01
Enter the original investment and its ending value.
- 02
Add separately received cash income and fees not already reflected in the ending value.
- 03
Enter elapsed years and inflation to compare total return, compound annualized return, and real annual return.
Examples
Nominal growth can match inflation
A 10% nominal annual return with 10% annual inflation has a 0% real annual return. The larger currency amount buys the same modeled basket.
Net proceeds and total return
Net proceeds equal ending value plus separately received cash income minus additional fees. Gain or loss equals those proceeds minus the initial investment. Dividing gain or loss by the initial investment gives total return. Include each distribution or fee once to avoid double counting.
Compound annualization
The annualized rate is (net proceeds ÷ initial investment)^(1 ÷ years) − 1. It is the constant yearly growth rate that connects the starting investment to the net proceeds when proceeds are treated as an ending lump sum. It differs from simply dividing the total return by years.
Real return and cash-flow limitations
Real annual return is (1 + nominal annual return) ÷ (1 + annual inflation) − 1. The calculation assumes constant inflation. Cash income received partway through the holding period is treated as if received at the end, so the result is not an internal rate of return or a timing-sensitive investment performance measure.
What to know
- One initial outlay and an ending-lump-sum assumption; no IRR, intermediate cash-flow timing, or time-weighted return.
- No live security prices, forecasts, tax rules, or personalized investment advice.
Common questions
What if the entire investment is lost?
If net proceeds are exactly zero, total and compound annualized returns are −100%. Negative net proceeds cannot be annualized with this real-valued growth model and are rejected.
Can I include extra purchases or partial sales?
No. Intermediate contributions and withdrawals change how much capital was invested and for how long. Use a cash-flow IRR or a suitable time-weighted method instead.
Are taxes included?
No tax rules are applied. You can enter a net ending value if appropriate, but this tool does not determine tax liability or compare account types.