Rate of Return Calculator
Measure investment performance by calculating your actual returns. Useful to compare different investment options and track portfolio performance.
Rate of Return Calculator
Result
How it works
Formula Used
RoR (%) = [(Final - Initial) / Initial × (1/Time)] × 100 Simple annualized return for direct comparison
Smart Tips
- Use XIRR for investments with variable cash flows
- Exclude dividend reinvestment to see actual returns
- Compare annualized returns fairly across time periods
Best Used For
Track mutual fund, stock, or property returns
FAQs
What's the difference between simple and annualized return?
Simple return: (Final-Initial)/Initial. Annualized return: compounds that over the period. Annualized is more accurate for comparing investments across different time periods. Use annualized return always.
Should I include dividends and interest in return calculation?
Yes, if you reinvested them (which most people do in mutual funds). Include all cash received + final value to get total returns. If you withdrew dividends, add them separately to understand true performance.
What's XIRR and when should I use it instead?
Use XIRR (Internal Rate of Return) when you invest at different times or make irregular contributions. Simple return assumes one-time investment. For SIPs or irregular investments, XIRR gives true performance.
How do I compare returns of funds with different time periods?
Always compare annualized returns. A 30% return over 5 years (5.4% annualized) is worse than 20% over 2 years (9.5% annualized). Annualization levels the playing field for fair comparison.
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