Enter an initial and final value, any income received along the way, and a holding period to find the simple and annualized rate of return.

How to Use the Rate of Return Calculator

Enter the initial investment value and its final value, then optionally add income received during the holding period — dividends or interest — and the number of years held. Leave the holding period at 1, or blank, and the annualized figure just matches the simple return.

Rate of return measures total gain against what was originally put in, including any income the investment threw off along the way, not just the change in its own price.

Simple Return = (Final Value − Initial Value + Income) ÷ Initial Value × 100

$10,000 growing to $11,500 while also paying out $300 in dividends returns 18% simple — $1,800 total gain against the original $10,000, regardless of how long that gain took to show up.

Annualizing Over Longer Holding Periods

Simple return doesn't care whether the gain happened in six months or six years, which makes it a poor way to compare two investments held for different lengths of time. Annualizing fixes that by spreading the same total return across the actual holding period:

Annualized Return = ((1 + Simple Return÷100)^(1÷Years) − 1) × 100

Held for exactly one year, this collapses to the same number as the simple return — there's nothing to spread it across. Stretch the same 18% gain over two years instead and the annualized figure drops to around 8.6%, because the same dollar gain took twice as long to arrive.

What "Income" Covers Here

The income field is for anything the investment paid out separately from its own price change — dividends, coupon interest, rental income collected alongside a property's appreciation. Leave it at zero for an investment that only ever changes in price, like a non-dividend stock held purely for capital gains.