Investment Return / CAGR Calculator
Give a start value and end value with time (years or date range), optionally add periodic contributions/withdrawals, and get total return, CAGR, IRR, and a simple growth chart.
Your investment details
Results
Simple growth chart
The balance path assumes contributions at the selected frequency and compounds at the implied IRR to match the end value. It’s illustrative, not a trade log.
Results interpretation: CAGR vs IRR & who this helps
- CAGR is a geometric average between start and end; it ignores intermediate cash flows.
- IRR (money-weighted) accounts for the timing of contributions/withdrawals and often better reflects real investor experience.
- Principal is your cash in (start + contributions). Gains are the difference between ending balance and principal.
- Use this when reviewing long-term accounts, DCA strategies, or comparing funds where you’ve added money over time.
How this calculator works
Formulas, steps & assumptions
Time span: either the entered years or the number of days between dates divided by 365.25 (MM-DD-YYYY).
Principal: start value + contributions (positive) or withdrawals (negative). Gains = end − principal.
CAGR (simple): if start > 0, (end ÷ start)^(1/years) − 1. This ignores interim cash flows.
IRR (annual): money-weighted return from cash flows at exact times t (years). We solve for r such that Σ CF_t / (1+r)^t = 0 using a robust bisection method. Cash flows are: time 0 = −start; each period end = −contribution; final time = +end.
Chart: builds a simple balance path by compounding at the implied IRR (if available) with contributions at the chosen frequency, so the last point matches the end value.
Assumptions: contributions occur at period end; fees/taxes not modeled; no partial-period day count for contributions (illustrative).
Use cases & examples
Example 1 (Lump sum only): Start $25,000 → End $61,500 over 5 years, no contributions: CAGR ≈ 19.73%.
Example 2 (Monthly DCA): Start $10,000; contribute $300/month for 7 years; end $52,000. IRR reflects the timing of the monthly buys, while simple CAGR overstates/understates depending on when gains occurred.
Example 3 (Withdrawals): Start $90,000; withdraw $500/month for 3 years; end $78,500. IRR shows the effective yield net of the withdrawals.
Investment Return / CAGR — FAQ
What’s the difference between CAGR and IRR?
CAGR is a time-weighted average that ignores the timing of cash flows. IRR (money-weighted) uses the exact timing of contributions/withdrawals and typically reflects the investor’s realized experience.
Should I use years or dates?
Use dates when accuracy matters (e.g., 03-15-2018 to 07-01-2024). The calculator converts to years using 365.25 days/year.
Can contributions be negative?
Yes—enter a negative number for withdrawals.
Why does total return show “contextual”?
If you added money over time, “end ÷ start − 1” is misleading. We instead show a yield on contributed cash: (end − principal) ÷ |principal|.
Why doesn’t my IRR match my brokerage?
Brokerages may include fees, exact trade timestamps, or different day-count conventions. This tool is designed for planning/education.
Can I export the chart data?
Copy the link with inputs and paste the values into a sheet; the path shows balance and cumulative contributions at each period.
Investment Return & CAGR Explained: A Practical Guide to Measuring Performance
The goal of our investment return calculator is clarity: how much your money grew, why it grew, and whether that growth is repeatable. This page focuses on two core metrics—CAGR and IRR—plus a breakdown of principal versus gains so you can see what part came from your cash versus market performance. Understanding these numbers helps you compare strategies, set expectations, and avoid common pitfalls like mistaking large deposits for strong returns.
Why CAGR is popular—and where it falls short
CAGR compresses a jagged multi-year path into a single smooth rate. It’s excellent for comparing strategies on an even footing and for communicating performance to non-experts. But CAGR ignores the timing of cash flows. If you added most of your money right before a downturn, your CAGR could look worse than the fund’s official return—and vice versa if you invested right before a strong rally. That’s why experienced investors use money-weighted measures alongside CAGR when cash flows are material.
IRR: the investor’s lens
The internal rate of return solves for the discount rate that makes the present value of your cash flows equal to zero. Practically, it answers: “If I treat all deposits as investments and the final balance as a sale, what annualized return would reconcile the math?” Because IRR respects cash-flow timing, it’s the better yardstick for DCA (dollar-cost averaging), regular 401(k) contributions, and retirement drawdowns.
Principal vs. gains: separating savings from performance
When your balance grows, two forces are at work: how much you saved and how well the investments performed. Tracking principal (start + contributions) and gains (ending − principal) clarifies progress. It’s also motivational: steady contributions compound into meaningful gains, even if returns aren’t spectacular every single year.
Setting realistic expectations
Historical returns arrive in streaks. A strong three-year run often cools; a dull stretch can rebound sharply. Instead of forecasting a single number, plan for ranges: conservative, middle, and optimistic. Build margin for sequence risk—the chance that early poor years hit before your portfolio has compounding mass.
How to use this calculator in real decisions
- 401(k)/IRA: Check if your long-run IRR is close to a reasonable benchmark for your mix.
- DCA plan: Evaluate whether adding a bit more each month moves the needle more than chasing higher risk.
- Withdrawal testing: For retirees, see how withdrawals affect IRR and how much performance you need to maintain balance.
- Fund comparison: When comparing funds, account for your own deposit timing; your IRR may differ from fund CAGR.
Limitations & best practices
This tool is educational. It doesn’t adjust for taxes, fees, inflation, or intra-period volatility, and it assumes contributions at period end. For audit-grade records, export cash flows from your brokerage and compute a daily IRR. For planning, triangulate: look at CAGR, IRR, and principal vs gains together.
Most importantly, stay consistent. Contributions and time in the market are still the biggest levers most investors control. Let compounding do its work.