Geometric Mean Return Calculator

Volatile returns lie when averaged normally. +150%, −60%, +80% 'averages' +56.7% arithmetically, but your money's true compound rate is far lower. This shows both.

Year 1 return

Year 2 return

Year 3 return

Results (live)

Arithmetic mean56.67%

Geometric mean (real CAGR)21.64%

$1,000 becomes$1,800

Estimates only, not financial advice. All math runs in your browser; nothing you type leaves this page.

How it works

geometric mean = (∏(1 + rᵢ))^(1/n) − 1

Worked example

Those three years turn $1,000 into $1,800: a 21.6% real CAGR, not 56.7%. The −60% year does damage an average hides.

FAQ

Why is geometric always lower?

Losses hurt multiplicatively. A −50% needs +100% to recover, and the geometric mean prices that asymmetry in while the arithmetic mean ignores it.

When is arithmetic mean fine?

For a single period's expectation. For anything held across periods, geometric is the honest number.

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Estimates only, not financial, tax or investment advice. Verify numbers against your exchange or a professional before acting.