Interpretation
This is a constant annual compound rate. Real investments rarely produce the same return every year, so read the result as the rate that connects the start and end values, not as a guaranteed return.
Example
Growing 1,000 to 1,500 over 5 years requires about 8.45% per year with annual compounding.
Common mistakes
Do not include extra deposits or withdrawals in this calculation. If you add money during the period, use an investment or compound interest calculator with contributions instead.
Limitations
The result does not include taxes, fees, inflation, investment volatility or changing rates. Loan APR and investment return calculations may also use different conventions.
Last reviewed: 2026-05-17