Average Return Calculator
Calculate arithmetic mean, geometric mean (CAGR), and IRR with charts and detailed analysis.
Related:
Enter Your Details
Return Type
Absolute Return
Percentage Return
Investment Details
$
$
years
Return Type
Arithmetic Mean
Geometric Mean (CAGR)
Dollar-Weighted
Investment Values
Enter the value of your investment at different points in time.
$
$
$
Your Results
Investment Return
Average Return
0.00%
Average Annual Return
| Metric | Value |
|---|---|
| Total Return | 0.00% |
| Annualized Return | 0.00% |
| Total Gain/Loss | $0.00 |
Return Details
| Period | Value | Return | Cumulative Return |
|---|
Understanding Average Returns
Arithmetic vs Geometric
The arithmetic mean adds up period returns and divides by the number of periods. The geometric mean (CAGR) multiplies growth factors and is better for compounding over time. Use arithmetic for expected value of independent returns; use geometric for actual investment growth paths.
Dollar-Weighted (IRR)
IRR accounts for the timing and size of cash flows. It’s useful when you add or withdraw money between periods, such as contributions or distributions.
Key Formulas
Arithmetic Mean:
Ra = (r1 + r2 + … + rn) / n
Geometric Mean (CAGR):
Rg = (∏(1 + ri))1/n − 1
IRR:
0 = Σ CFt / (1 + r)t