What annualising solves
Total return (ROI) only says how much you made over the whole period. Annualising converts it to "how much per year compounded", so investments of different lengths can be compared on one scale.
Annualising assumes returns compound evenly, so it is a conversion convention — not evidence that you will earn that rate every year.
Formulas
(final value − initial investment) ÷ initial investment × 100%(final value ÷ initial investment)^(1 ÷ years) − 1months held ÷ 12Worked example (recompute it yourself)
Invest 1,000 USDT, worth 1,728 USDT after 3 years: total return = (1,728 − 1,000) ÷ 1,000 = 72.8%; CAGR = 1.728^(1÷3) − 1 = 1.2 − 1 = 20%.
Check: 1.2 × 1.2 × 1.2 = 1.728, which reproduces the 72.8% total return.
Held for only 6 months (0.5 years), 1,000 to 1,100 gives CAGR = 1.1^(1÷0.5) − 1 = 1.1² − 1 = 21%. This is a conversion only, not something to expect to repeat.
Notes
The shorter the sample, the more inflated the annualised figure: a few weeks of gains annualised can look extreme and say little.
Keep the convention consistent before annualising — decide whether fees and funding are inside the initial investment and final value.
FAQ
Can I just divide total return by years?
No. That is a simple-interest measure and understates compounding. A 72.8% total over 3 years is 20% annualised, while 72.8% ÷ 3 ≈ 24.27%.
How do I enter a period under a year?
Enter years as a decimal — 6 months is 0.5, 3 months is 0.25 — and the calculator annualises with the CAGR formula.
Does a high annualised figure mean a good investment?
Not necessarily. It only reflects the compounding conversion for this sample; short samples inflate it, and it ignores drawdown and risk.