2017 RANKING & REVIEWS
TOP RANKING ANNUAL RATE OF RETURN CALCULATORS
Finding the Best Annual Rate of Return Calculator
Wouldn’t it be nice to know what type of return you will be getting on an investment or deal? When analyzing any investment, it is always important to do an annualized return calculation. By taking the time to calculate annual return, you can have a big picture look at whether your money is working hard enough for you.
The real problem is how to calculate annualized return on an investment. There are many complex parts of an annualized return formula that make it difficult to calculate annualized return if you have no financial background.
Many people need to calculate annual rate of return and use it to determine if they are on track to meet their long-term investment goals. However, this is dependent on many different on many different factors. You need to consider tax rates, initial investments, and length of the investment, among other components, when calculating annual rate of return.
Award Emblem: Top 6 Best Annual Rate of Return Calculators
This can quickly become overwhelming, which is why people rely on online financial calculators to calculate annual return. The tricky part is finding the best average annual return calculator for you. Some calculators are more complex than others, and some are more user-friendly than others.
While searching for an average annual return calculator, you may be wondering the following things:
- How to calculate annualized return
- What the best annualized return formula is
- What information you need when calculating annual rate of return
- What an annualized return calculation tells you
Throughout this article, we aim to answer these questions. Our 2017 guide to finding the best annualized return calculator is designed to walk you through the basics of the annual rate of return formula, what information you need while calculating annual rate of return, and what the best annual return on investment calculator is for you.
Advisory HQ’s List of Top Annual Rate of Return Calculators
The list below is sorted alphabetically (click any of the calculators names below to go directly to the detailed review sections):
Top 6 Best Annual Rate of Return Calculator Options | Brief Comparison & Ranking
Best Annual Rate of Return Calculators
Type of Calculation
|Dinkytown||Annual Rate of Return|
|Financial Calculator||Return on Investment|
|Investopedia||Compound Annual Growth Rate|
|Key Bank||Annual Rate of Return|
|Moneychimp||Annual Rate of Return|
Table: Top 6 Best Annual Return on Investment Calculator | Above list is sorted alphabetically
Detailed Overview: How to Calculate Annualized Return
The annual return on investment is the return that an investment provides over time. This number is expressed as a time-weighted annual percentage. This number is important to know whether you are analyzing different capital projects, determining where to invest your booming portfolio, or simply trying to plan for your financial future.
However, it is not necessarily easy to calculate annual rate of return. When you calculate annualized return, it goes far beyond simply dividing the profits as a percentage of the investment. Rates of return need to incorporate many other factors, like taxes, inflation, time and even exchange rates.
The most common method to calculate annual return is using Compounded Annual Growth Rate (CAGR). CAGR represents the annual growth rate of an investment for a certain period using the following formula:
Image source: Investing Answers
By using this annualized return formula, we can see what the annual return would be on an investment. This allows you to compare investment opportunities or capital projects to see if one is a better option.
Detailed Overview: Why Do You Need an Annual Rate of Return Calculator?
When you are comparing different investment opportunities, things are not always as they appear.
At first glance, a $100,000 investment that nets you $5,000 in profits might seem better than a $10,000 investment that gives you $1,000 in gains. However, there is more to the picture—other factors that come into play.
Image Source: Pixabay
On paper, $5,000 looks better than $1,000. However, what if the $100,000 project was a 10-year investment, and the $10,000 investment opportunity was only a year? Or what if the $100,000 investment was taxed at a higher rate? These variables can greatly impact your investment decision. This makes it easy to see how time, taxes, inflation, and other factors can come into play and why an annualized return calculator is a valuable asset.
An annual rate of return formula is not always easy to follow, which is why there are calculators out there that allow you to input figures. Calculating annual rate of return is not an easy task, and it is easy to get variables mixed up. That is why it is important to use an annual rate of return calculator for your analysis.
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Detailed Review—Top Ranking Annual Return on Investment Calculator
Below, please find the detailed review of each annual rate of return calculator on our list of best annualized return calculators. We have highlighted some of the factors that allowed these annual return on investment calculators to score so high in our selection ranking.
If you are looking to meet long-term investment goals, you may need help calculating annual rate of return. That is where Bankrate comes in with their annual rate of return calculator.
This financial calculator is a bit different in the fact that it uses your annual rate of return to calculate your investment totals. There are inputs for years, rate of return, initial investment, annual investment, expected inflation rate, and tax rate. This is what sets Bankrate apart from other annual rate of return calculators—it accounts for taxes and inflation.
Like others on our list, this annual rate of return calculator shows a graph that displays what your annual investment returns would be with compound interest, simple interest, as well as your invested capital.
Bankrate really puts out a nice annualized return calculator. The calculator is very easy to use, with clearly defined variables. You won’t be worrying about what the correct input variables are with this calculator.
Overall, the Bankrate calculator is a good option for a personal investor, especially one concerned with taxes and inflation.
Don’t be fooled by the name—the Dinkytown annual rate of return calculator is anything but dinky. This annual rate of return calculator considers several different variables.
If you know the initial investment, stream of deposits, and future value, you can use this annualized return calculator to determine what your annual rate of return would be.
There are inputs for start date, end date, initial deposit amount, future value, periodic deposit/withdrawal, and deposit/withdrawal frequency. By inputting this information, you can easily calculate annual return.
The Dinkytown annualized return calculator is a great asset because it breaks down each component. You will see thorough explanation of what data is being requested for each input. This makes the calculator easy to use, even for those who aren’t familiar with the annual rate of return formula.
As an added bonus, the Dinkytown annualized return calculator also issues a report on the results. It shows graphs that chart the future value of initial deposit, future value of periodic deposits, and total future value.
Image source: Pixabay
Overall, this average annual return calculator is a great asset to any personal investor. The user interface is very easy to use, the variables are clearly defined, and the results are easy to understand. If you don’t need to account for taxes, inflation, etc., this is a good annual rate of return calculator to use.
Financial Calculators Review
This ROI calculator from Financial Calculators will calculate annual return for you. One drawback to this model is that you need to provide exact dates. That means you can’t plug in a generic 5-year investment to calculate annual return.
Still, this average annual return calculator is very easy to use. You simply input the amount invested, amount returned, days, start date, and end date. After hitting the CALC button, the model will display your gain or loss, percentage gain or loss, annual return (ROR), and total years.
This calculator is very simple and easy for someone without knowledge of the annual rate of return formula. However, there isn’t much complexity to the calculator. So while it is easy to use, it won’t account for taxes, inflation, or deposits.
If you are looking for a simple average annual return calculator, then the one offered by Financial Calculators might be a good option for you. There are no flashy charts or reports, only 4 generated numbers. However, if those 4 numbers are what you are looking for, it’s a simple option.
If you want simplicity, look no further than the Investopedia annual rate of return calculator. Three inputs—beginning value, ending value, number of periods—is all it takes to generate the Compound Annual Growth Rate. Though simple, this tool is very useful when determining the annual growth rate on an investment with fluctuating growth rates over time.
The instructions are clearly laid out, and the annual rate of return calculator is very easy to use. After inputting the three variables, the CAGR will be displayed, along with an explanation of what that number means. This is nice since other calculators don’t necessarily explain what the meaning of the derived value is.
We mean it when we say this average annual return calculator is simple. Three inputs and one output is what this model is all about. However, if you are in a hurry or analyzing a large number of investments, this is a great way to weed out the bad investments quickly, before moving to a more detailed average annual return calculator.
Key Bank Review
Key Bank is likely the most familiar name on this list of calculators. The large bank network offers an annual rate of return calculator right on their website to help you determine the annual return on an investment.
You will need to know start date, end date, initial deposit amount, future value, periodic deposit/withdrawal, and deposit frequency with this annualized return calculator.
The user interface is well designed, which makes sense since it is a part of the Kay Bank website. The calculator also shows definitions of each variable and what numbers need to be entered, which makes it easy to calculate annual return.
If you want a sound annualized return calculator that is backed by a big name in the financial world, the Key Bank calculator might be your best bet. There are charts generated to help explain the calculation and document what your investments will be worth. Overall, this is a good annualized return calculator.
Moneychimp provides a nice little investment performance calculator as well. This average annual return calculator takes only 5 inputs—starting balance, ending balance, months elapsed, total additions, and total withdrawals and dividends—and displays your annual rate of return.
This is a very easy-to-use average annual return calculator, even for someone with little knowledge of calculating annual rate of return. The nice thing about this calculator is that it takes the time to explain how it works and shows some different examples. It is nice to see how the number is derived, especially if you do not know the annualized return formula.
If you are looking for a no-frills, easy-to-use annual rate of return calculator, then it is worth it to check out the one offered by Moneychimp. Again, there are no charts or reports generated, just your annual rate of return. However, if this is all you need or are looking for, the Moneychimp annual rate of return calculator is a solid option.
Conclusion—Top 6 Best Annualized Return Calculators
When you are planning your financial future, it is important to know the annual rate of return formula and how to use it. When you calculate annual rate of return you will know how sound an investment looks and how that investment stacks up against others in your portfolio.
However, the ability to calculate annualized return does not come easy to everyone, even if you know the annual rate of return formula. That is where an annual rate of return calculator comes in handy.
There are many average annual return calculators out there, so be sure to find one that gleans the information that you are looking for. If you need a simple annualized return calculator, some might be better to use than others. Other calculators out there are more complex and take a deeper understanding of the annualized return formula.
When you are looking for the best average annual return calculator, be sure to consider the following aspects:
- User interface
- Complexity of calculator
- Amount of inputs
- Type of information output
Be sure that you consider a few different calculators when looking for one to calculate annual rate of return. There are many options out there, and the first one might not be the best to do an annualized return calculation for you.
While the “best” average annual return calculator depends on the person looking, we have compiled a list of the 6 top calculators out there to help you begin your research.
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