Investment Return Calculator

What did your money actually earn? Plug in what you started with, what you added each month, and what you ended with — this works backwards to your effective annualized return.

With a $10,000 starting balance, $500 added monthly, and a final value of $150,000 after 10 years, your money earned about 12.9% per year on average. This calculator reverses the growth math: instead of predicting a future value from a return rate, it finds the return your real numbers actually produced. Enter what you started with, what you added, and what you ended with — it works out the honest annualized return, contributions and growth.

Your investment

Calculations run in your browser. Inputs are not stored.

Starting balance

Monthly contribution

Years invested

10 years

Final balance

Compound frequency

How often interest is credited to your balance — your monthly contribution stays the same.

Effective annualized return over 10 years

12.9% p.a.

You invested$70,000

Growth to $150,000$80,000

ContributionsGrowth

Show yearly breakdown

Year	Contributions	Growth	Balance

How this calculation works

The formula

We take the exact compound formula used everywhere on this site and solve it for the monthly rate instead of the balance. Given starting balance P, monthly contribution M, final balance FV and N months:

FV = P·(1+i)^N + M·( ((1+i)^N − 1) / i ) → solve for i

The monthly rate i is found numerically (binary search). Effective annualized return is (1+i)¹² − 1; the secondary nominal annual rate uses the selected compounding frequency (12 × i for monthly compounding). The result is a money-weighted return over equal month-end contributions.

Assumptions

Contributions are added at the end of each month (ordinary annuity).
The result is a money-weighted annual return — it models equal monthly contributions, not irregular cash-flow dates.
Returns are assumed constant across the whole period; this isolates the average rate that would produce your final balance.
The result is not inflation-adjusted (real) return. Fees and taxes already reflected in your ending balance affect the result, but the tool does not model them separately. It does not support irregular cash flows, withdrawals or XIRR.
If the final balance is below your total contributions, the return is negative.

View the formula →

Educational purposes only. Not financial advice. See the full methodology and disclaimer.

Worked examples

See how to interpret your actual annualized return. All examples assume monthly contributions at month-end.

Example 1: The "7% return" reality check

Started with: $10,000 · Contributed: $500/month for 20 years · Final balance: $300,851

Annualized return

7.23%

Total invested

$130,000

Investment growth

$170,851

This example uses an illustrative 7% nominal annual rate, not a historical real-return assumption: starting with $10,000 and adding $500/month for 20 years, a 7% nominal annual rate compounded monthly (7.23% effective annualized return) gets you to $300,851. You contributed $130,000 of your own money — the remaining $170,851 (57% of the final balance) came from compound growth. The key insight: your money-more-than-doubled because of compounding, but it took 20 years. This is why "7% average return" doesn't mean your account goes up 7% every year — the monthly-compounded nominal rate is 7%, equivalent to a 7.23% effective annual rate.

Example 2: Same contributions, very different outcomes

Same $10k + $500/month for 20 years · different final balances

Final: $200,000

3.84%

annualized

Final: $300,851

7.23%

annualized

Final: $500,000

11.24%

annualized

For the same $10,000 start and $500 monthly contributions over 20 years, ending balances of $200,000, $300,851 and $500,000 imply effective annualized returns of about 3.84%, 7.23% and 11.24%, respectively. These are equivalent modeled rates, not asset-class forecasts.

Example 3: Lump sum investing — the 7.00% question

Started with: $50,000 · No monthly contributions · 5 years later: $70,128

Annualized return

7.00%

Total gain

$20,128

Gain as % of initial

40.3%

You invested $50,000 as a lump sum and 5 years later it's worth $70,128. That's a 40.3% total gain — but your annualized return is only 7.00%, not 40.3%. This is the most common mistake investors make: confusing total return with annualized return. A 40% gain over 5 years sounds great, but it's only 7.00% per year — roughly in line with a conservative stock/bond portfolio. If you had been told this investment "returned 40%," you might think it beat the market. But the annualized 7.00% tells the real story. Always evaluate investments by their annualized return, not their total gain — especially when comparing investments held for different lengths of time.

All examples assume monthly contributions at month-end and a constant annualized return. Actual investment returns are not constant and will vary year to year. See full disclaimer.

Investment returns, explained

How is the annual return calculated?

It solves the compound interest formula in reverse. Given your starting amount, monthly contribution, years and final balance, it finds the monthly rate i that makes FV = P(1+i)^N + M(((1+i)^N−1)/i), then annualizes it. The math is identical to our forward calculators — just solved for the rate instead of the balance.

Is this the same as my account's stated return?

With no additional contributions, effective annualized return equals CAGR. With contributions, this tool solves a money-weighted monthly rate for equal month-end deposits. It does not model irregular dates, withdrawals or XIRR.

What if my final balance is lower than I invested?

The tool can report negative returns. Some final balances cannot be reached under the fixed month-end contribution schedule; those cases display "No solution" rather than an annual return.

Why does this matter for judging my investing?

This return summarizes your stated initial investment, equal monthly contributions and ending balance. A fair benchmark comparison needs the same contribution amounts and dates; a benchmark buy-and-hold return alone does not isolate your investment decisions.

What's the difference between annualized return and total return?

Total return is the raw percentage gain over the entire period: if $50,000 becomes $70,128, that's a 40.3% total return. Annualized return (CAGR when there are no intermediate contributions or withdrawals) is what the investment would have returned each year if growth were smooth: that same $50,000→$70,128 over 5 years is a 7.00% annualized return. Annualized return is the meaningful number because: (1) it lets you compare investments held for different time periods, (2) it's what "the market returns 7% per year" refers to, and (3) it accounts for compounding. A 100% total return over 10 years is only 7.2% annualized — not the home run it might sound like.

How do fees and taxes affect my actual return?

The result reflects the final balance you enter. Fees or taxes already deducted from that balance affect the implied return; the tool does not model them separately and does not adjust for inflation.