About the Implied Return Calculator
What is the Implied Return Calculator?
Every price implies a return. This implied return calculator finds the annual rate that links what you pay today with the exit value you expect and the income you receive along the way.
It separates the price-only CAGR from the income yield so you can see where the return comes from.
How to use the Implied Return Calculator
- Price Paid Today (₹) (sample: 1,000)
- Expected Value at Exit (₹) (sample: 1,800)
- Years to Exit (sample: 5)
- Dividends / Income per Year (₹) (sample: 15)
- Press Calculate Implied Return (results also refresh as you type). The result card shows the Implied Annual Return, along with Price-only CAGR, Income yield on price, Total money received and Total return multiple.
Formula used
0 = −Price + Σ Income ÷ (1 + r)ᵗ + Exit value ÷ (1 + r)ⁿ
- Price-only CAGR = (exit value ÷ price)^(1 ÷ n) − 1
If the implied return is below your required return, the price is too high.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Price Paid Today (₹) | 1,000 |
| Expected Value at Exit (₹) | 1,800 |
| Years to Exit | 5 |
| Dividends / Income per Year (₹) | 15 |
| Result | Value |
|---|---|
| Implied Annual Return | 13.68% |
| Price-only CAGR | 12.47% |
| Income yield on price | 1.5% |
| Total money received | ₹1,875 |
| Total return multiple | 1.88× |
Tips for using the Implied Return Calculator
- Use conservative exit values; small changes have large effects over short periods.
- Compare the implied return with low-risk alternatives such as government bonds.