Our Average Annual Return Calculator helps you effortlessly determine the compounded annual growth rate of your investments. Understand your portfolio's true performance by inputting your initial investment, final value, and total contributions. Perfect for investors, financial planners, and anyone keen on tracking financial growth.
Formula:
The Average Annual Return (AAR), often synonymous with Compound Annual Growth Rate (CAGR) for a single investment, is calculated using the following general formula:
AAR = ((FV / IV)(1 / N)) - 1
Where:
- FV = Final Value (The total worth of your investment at the end of the period)
- IV = Initial Value (The starting capital invested)
- N = Number of Years (The total duration of the investment)
Note: Our calculator adjusts for total contributions to provide a more comprehensive average annual return, even without specific contribution dates.