Use this advanced gizmo calculator to determine your annualized return on investment (ROI). Whether you are missing the final value, time duration, or the rate itself, this tool solves for all variables to help you understand your portfolio’s performance over time.
Gizmo Calculator
Leave one field empty to solve for it.
Gizmo Calculator Formula:
Formula Source: Investopedia – Annualized Return Definition | SEC.gov Financial Tools
Variables:
- Vi (Initial Investment): The starting amount of money you invested.
- Vf (Final Value): The total amount of money at the end of the investment period.
- t (Time Period): The duration of the investment expressed in years.
- r (Annualized Return): The geometric average amount of money earned by an investment each year over a given time period.
What is Gizmo Calculator?
The gizmo calculator (commonly known as an Annualized Return or CAGR calculator) is a critical tool for investors to compare the performance of different assets on an apples-to-apples basis. Unlike simple return, which only looks at total growth, annualized return accounts for the “time value” of money.
By using this calculator, you can strip away the noise of short-term volatility and see how your wealth would have grown if it had compounded at a steady rate over the specified years. It is widely used for evaluating stocks, mutual funds, and real estate performance.
How to Calculate Gizmo Calculator (Example):
- Identify your starting capital (e.g., $5,000).
- Check your current balance after 3 years (e.g., $6,500).
- Divide the final value by the initial value: $6,500 / $5,000 = 1.3.
- Raise the result to the power of 1 divided by the number of years: 1.3(1/3) ≈ 1.0914.
- Subtract 1 to get the decimal: 1.0914 – 1 = 0.0914.
- Multiply by 100 to find the percentage: 9.14%.
Related Calculators:
- Compound Interest Gizmo
- Stock Profit & Loss Calculator
- Inflation Adjusted Return Tool
- Dividend Reinvestment (DRIP) Calculator
Frequently Asked Questions (FAQ):
Is annualized return the same as CAGR?
Yes, in most investment contexts, the Annualized Return and Compound Annual Growth Rate (CAGR) refer to the same geometric mean of return.
Can I calculate a negative return?
Absolutely. If your final value is lower than your initial investment, the gizmo calculator will yield a negative percentage, indicating a loss.
Why is time measured in years?
Standardizing time to years allows investors to compare a 6-month bond to a 10-year real estate investment accurately.
Does this include dividends?
To get the “Total Return,” you should add any dividends received to your Final Value (Vf) before calculating.