finance calculator
Average Return Calculator
Enter up to 20 yearly returns to see the simple average, cumulative return, average per year, and the single equivalent CAGR-style rate.
Results
- Simple average return
- 1.40%
- Cumulative return
- 30.20%
- Average per year (cumulative ÷ years)
- 1.51%
- Equivalent single rate (CAGR-like)
- 1.33%
How to use this calculator
- Enter up to 20 yearly returns (use negatives for down years).
- We calculate the arithmetic average, total cumulative return, the per-year cumulative average, and the equivalent single rate.
- Use the outputs to compare portfolios or check how volatility skews average vs compounded results.
Inputs explained
- Year returns
- Annual returns expressed as percentages. Leave unused years blank.
How it works
Simple average = sum of yearly returns ÷ number of years.
Cumulative return multiplies each year’s factor (1 + r) to show the total gain/loss across the whole period.
Cumulative average per year = cumulative return ÷ number of years (not compounded).
Equivalent single rate = (1 + cumulative return)^(1/years) − 1 (CAGR-style).
When to use it
- Comparing arithmetic average vs compounded growth rate for a volatile portfolio.
- Showing how a single bad year drags the compounded result more than the simple average.
- Summarizing historical returns into a single equivalent rate for reporting.
Tips & cautions
- Arithmetic average overstates expected compounded growth when volatility is high.
- Include negative years to see how drawdowns affect the equivalent rate.
- Use the equivalent single rate (CAGR-style) for long-term planning comparisons.
- Assumes all returns are realized sequentially with reinvestment; ignores contributions/withdrawals and taxes.
- Outputs are estimates for illustration; not investment advice.
Deep dive
Calculate average return, total cumulative return, and an equivalent single CAGR-style rate from up to 20 annual returns.
See how arithmetic averages differ from compounded results when volatility is high.
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