The Average Return Calculator can calculate an average return for two different scenarios. The first is based on cash flows, and the second calculates a cumulative and average return of multiple investment returns with different holding periods.
• Cash Flow (XIRR): Calculate the annualized money-weighted return considering the exact calendar dates of deposits and withdrawals.
• Multi-Period (CAGR): Compute cumulative geometric mean return across distinct holding periods of varying lengths.
This calculator estimates the average annual return of an entire account based on the starting and ending balances as well as the dates and amounts of deposits or withdrawals.
12.38% / year
Evaluating the performance of an investment portfolio requires choosing the appropriate rate of return metric. Because investors frequently deposit and withdraw money at irregular dates, simple arithmetic averages can produce misleading results.
XIRR calculates the exact annualized internal rate of return for portfolios with irregular cash inflows and outflows. It reflects the personal investor experience by weighting returns based on when more or less money was in the market.
The Compound Annual Growth Rate measures the smoothed annual rate at which an investment grows over multiple holding periods, accounting for the compounding effect of gains and losses.
A simple arithmetic average overestimates long-term compound growth. For instance, a +50% gain followed by a -50% loss yields an arithmetic mean of 0%, but an actual cumulative loss of -25%.
Forecast compound growth and regular contributions over time.
Calculate simple and compound interest accumulation schedules.
Compute Return on Investment percentage and annualized gain.
Determine project Internal Rate of Return across periodic cash flows.