The formulas
Profit = (Sell − Buy) × Shares + Dividends − Fees. Total return = Profit ÷ Amount invested. Annualized return = (1 + Total return)1 / years − 1. Price return ignores dividends: (Sell − Buy) ÷ Buy.
Example: 100 shares bought at $50, sold at $80 after 5 years
The shares cost $5,000.00 and sell for $8,000.00. With $4 a share of dividends ($400.00), the profit is $3,400.00: a price return of 60%, a total return of 68% and an annualized return of 10.93% a year.
Total return to annualized return
| Total return | Over 3 years | Over 5 years | Over 10 years | Over 20 years |
|---|
| 25% | 7.72% | 4.56% | 2.26% | 1.12% |
| 5% | 14.47% | 8.45% | 4.14% | 2.05% |
| 1% | 25.99% | 14.87% | 7.18% | 3.53% |
| 2% | 44.22% | 24.57% | 11.61% | 5.65% |
| 4% | 71% | 37.97% | 17.46% | 8.38% |
What an annualized return grows $10,000 into
| Annualized return | 10 years | 20 years | 30 years |
|---|
| 4% | $14,802.44 | $21,911.23 | $32,433.98 |
| 7% | $19,671.51 | $38,696.84 | $76,122.55 |
| 1% | $25,937.42 | $67,275.00 | $174,494.02 |
To project future growth with regular contributions, use the compound interest calculator; to see how long an investment lasts once you start drawing on it, use the compound interest calculator with withdrawals.
Frequently asked questions
How do you calculate profit on a stock?
Profit = (Sell price − Buy price) × Shares + Dividends received − Fees. Buying 100 shares at $50 and selling at $80 with $4 of dividends per share and no fees is a profit of $3,400.
What is the difference between total return and annualized return?
Total return is the gain over the whole holding period; annualized return spreads it into an equal yearly rate. A 68% total return over 5 years is an annualized return of 10.93%, because each year’s gain compounds on the last.
How do you calculate annualized return?
Annualized return = (1 + Total return)^(1 / Years) − 1. For a stock that doubled (a 100% total return) in 10 years, that is 2^(1/10) − 1 ≈ 7.18% a year.
Should dividends be included in stock returns?
Yes. Total return counts dividends as well as the price change, and for many dividend stocks dividends are a large part of the return. This calculator treats dividends as cash received; reinvesting them buys more shares and usually raises the return further.
What has the S&P 500 returned on average?
Over long periods the S&P 500 has returned roughly 10% a year on average with dividends reinvested, before inflation, but individual years range from large losses to large gains. To estimate an index investment, enter its starting and ending index level as the buy and sell price.
Does this calculator include taxes?
No. In the US, gains on stocks held more than a year are usually taxed as long-term capital gains and dividends may be qualified or ordinary; both reduce what you keep. Subtract the tax from the sell proceeds to see an after-tax return.