Why is my annualised return lower than my total return?

Because you held for more than a year. A 30% gain over three years annualises to about 9%, which is the figure to compare against anything else.

Investmentstocks

Stock Profit & Loss Calculator

Profit on a share trade after costs, with the annualised return alongside the total. A 30% gain over five years is a very different result from the same gain in one, and only the annualised figure says which.

Also called: share profit calculator, stock gain calculator.

Net profit

₹6,000

₹6,000 on ₹20,000 invested, a return of 30%. Held for 1 years that annualises to 30%.

Before costs

₹6,000

Total invested

₹20,000

Sale proceeds

₹26,000

Total return

30%

Annualised return

30%

Price needed to break even

₹200

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Profit is the difference in price times the shares, less every charge on both sides. The total return divides that by what you put in. The annualised return compounds it back over the holding period, which is the only way to compare trades of different lengths, and it is where most reported returns quietly flatter themselves by omitting the time.

profit = shares * (sell - buy) - costs; annualised return compounds the total return over the years held

q: Shares (shares)
P_b: Buy price (currency)
P_s: Sell price (currency)
c: Costs (currency)
t: Years held (years)

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

the same gain over three years annualises far lower

Shares: 100
Buy price: 200
Sell price: 260
Brokerage and charges, both sides: ₹0
Years held: 3

Net profit₹6,000

1.3^(1/3) - 1, computed independently

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costs raise the break-even above the buy price

Shares: 100
Buy price: 200
Sell price: 260
Brokerage and charges, both sides: ₹500
Years held: 1

Net profit₹5,500

arithmetic identity

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a thirty percent gain over one year

Shares: 100
Buy price: 200
Sell price: 260
Brokerage and charges, both sides: ₹0
Years held: 1

Net profit₹6,000

boundary: over exactly one year the two returns are equal

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Method and limits

What it assumes

No dividends received. Add them to proceeds if there were any.

What it deliberately does not model

Capital gains tax is separate and depends on holding period and market.
Annualising a very short holding produces a large number that means little.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Why is my annualised return lower than my total return?: Because you held for more than a year. A 30% gain over three years annualises to about 9%, which is the figure to compare against anything else.