Average Return Calculator
Enter at least 2 values (a starting value plus one or more year-end values).
| Year | Value | Return |
|---|
Average annual return is the simple (arithmetic) average of each period's percentage return — a different, usually higher, number than CAGR or IRR, which account for compounding.
Free average annual return calculator that shows CAGR right alongside it — a well-documented pitfall in investing is that arithmetic average return is always higher than (and can meaningfully overstate) what an investment actually compounded to, especially for volatile years. This tool shows both so the gap is visible instead of hidden.
How it works
- Paste your yearly values, one per line, starting value first
- See the arithmetic average annual return, CAGR, and overall change side by side
- Expand the year-by-year table to see each period's individual return
Frequently asked questions
Why are average return and CAGR different numbers for the same data?
Average return is the simple arithmetic mean of each year's percentage change. CAGR is the single steady rate that would have produced the same overall change. For volatile investments, average return is always the same or higher than CAGR — a classic example is a portfolio that goes +50% then -50%: the average return is 0%, but the portfolio actually lost 25% of its value (CAGR is negative).
Which number should I actually use?
CAGR reflects what actually happened to your money. Average return is more useful for statistical comparison across many periods. Showing both, rather than just one, is the point of this tool.
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From the blog
Update history
- 2026-09-01 Added: a cover image (two paths splitting from a coin stack — one smooth and rising, one jagged and ending lower) — used as the card thumbnail, social share image, and blog title image.
- 2026-09-01 Launched: average return calculator (no button) — arithmetic average annual return shown alongside CAGR for direct comparison, with a year-by-year return table. Entirely client-side.