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Cumulative Rate of Return Calculator + How to Calculate It
📈 Cumulative Return Calculator
Calculate your investment's total return:
Total amount invested
What it's worth now
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To calculate annualized return
Cumulative rate of return = the total percentage your investment has gained or lost since you bought it.
Not per year. Not adjusted for anything. Just: “I put in $X, now I have $Y, what’s the total return?”
The Formula
Cumulative Return = ((Ending Value - Starting Value) / Starting Value) × 100
Example:
- Invested: $10,000
- Current value: $15,000
- Cumulative return: (($15,000 - $10,000) / $10,000) × 100 = 50%
That’s it. Your investment grew by 50% total.
Cumulative vs. Annualized Return
These are different things:
| Metric | What it measures | Example |
|---|---|---|
| Cumulative | Total return over entire period | “Up 50% total” |
| Annualized | Average return per year | “Up 8.4% per year” |
If you invest $10,000 and it becomes $15,000 over 5 years:
- Cumulative return: 50%
- Annualized return: 8.4%/year
The annualized formula: ((Ending / Starting) ^ (1/years) - 1) × 100
When to Use Each
Use cumulative return when:
- Comparing investments held for the same time period
- Looking at your total portfolio growth
- Checking if you hit a specific target (“I wanted to double my money”)
Use annualized return when:
- Comparing investments held for different time periods
- Comparing to benchmarks (S&P 500 averages ~10%/year)
- Planning future growth expectations
Real-World Example
Let’s say you’re comparing two investments:
| Investment | Held | Start | End | Cumulative | Annualized |
|---|---|---|---|---|---|
| Stock A | 3 years | $10,000 | $14,000 | +40% | +11.9%/yr |
| Stock B | 7 years | $10,000 | $18,000 | +80% | +8.8%/yr |
Stock B has higher cumulative return (80% vs 40%), but Stock A has higher annualized return (11.9% vs 8.8%).
Stock A is actually the better performer — it just hasn’t been invested as long.
What About Contributions?
If you add money over time, include all contributions in your “Starting Value”:
- Initial investment: $10,000
- Added $5,000 more after year 2
- Current value: $20,000
Your starting value = $15,000 (total invested), so:
Cumulative return = (($20,000 - $15,000) / $15,000) × 100 = 33.3%
This gives you an honest picture of your actual return, not inflated by the new money you put in.
Quick Reference
| Starting | Ending | Cumulative Return |
|---|---|---|
| $10,000 | $11,000 | +10% |
| $10,000 | $15,000 | +50% |
| $10,000 | $20,000 | +100% (doubled) |
| $10,000 | $8,000 | -20% |
| $10,000 | $5,000 | -50% |
Use the calculator at the top to check your own investments. For tracking your portfolio’s cumulative return over time automatically, check out PopaDex (disclosure: I work on it).