LEAP Return Calculator
The formula
What the leap return tells you
Exactly what leap return earned: total return, the annualised CAGR that makes it comparable, and the split between price gain and income.
Calculation: Total return = (sell + income − buy) ÷ buy; CAGR = ((sell + income) ÷ buy)^(1/years) − 1. Enter your inputs and every substitution is shown below the result.
Reading the result
Compare with the boring alternative over the same window — the verdict bands anchor to long-run market returns; income-heavy gains are usually steadier than price-only ones.
Rules of thumb: Long-run real equity return sits near 6–7 % nominal CAGR plus inflation; bonds run 2–4 points lower.
Limitations and best practice
Ignoring the timing of income (reinvested vs spent) can overstate a CAGR by a few tenths; dividends spent as cash belong outside the ending value.
This calculator gives an estimate based on standard formulas; it is not professional financial, medical, legal or engineering advice. Verify anything you plan to act on with a qualified professional and your own records.
Frequently asked questions
Why does CAGR differ from average yearly return?
Are taxes included?
Source & methodology
Time-weighted return arithmetic per CFA Institute conventions.
LEAP Return explained: formula, worked example and honest limits
Capital decisions deserve better than a gut feeling — this page gives you the arithmetic to defend one. LEAP Return is the kind of number people argue about from memory. This page ends that argument with arithmetic you can watch happen: enter your figures, get Total return in real time, and see every substitution printed below.
People rarely disagree about arithmetic; they disagree about assumptions that were never written down. Printing the substitution and the sensitivity ranking removes that category of disagreement for LEAP Return.
What makes LEAP Return worth calculating is not precision but position: it tells you which side of a threshold you are on, and by how much. A rough figure that settles the direction beats an elaborate one that never commits.
Every figure in the prose is generated by the engine rather than written beside it — the worked example resolves to total return = 241.29% on the default inputs, and the sensitivity section ranks the inputs that move the result — Buy price / invested first, at ≈15.7 % of the headline for a ten-percent error either way in that input. Work down the page and by the end you could re-derive the result in a spreadsheet from memory.
How LEAP Return is computed, line by line
The engine implements a single stated model: Total return = (sell + income − buy) ÷ buy; CAGR = ((sell + income) ÷ buy)^(1/years) − 1. There is no hidden coefficient and no login-gated precision — the formula printed is the formula executed, which is also what makes the result citable.
Buy price / invested ($) (example value 8,900) is a numeric input whose unit is fixed by the label; a wrong unit is a wrong answer wearing a plausible disguise. Use the figure exactly as the source document states it, not a rounded memory of it — an omitted line is the classic silent error.
Sell price / value now ($) (example value 29,250) is a plain measured quantity — the unit shown in the label is the unit the formula expects. If your source quotes a figure before and after some deduction, decide which one the formula wants and be consistent for every field.
Holding period (years) (example value 8) is a quantity rather than a category — precision here is cheap and worth having. If the period is partial, decide whether you mean elapsed or planned time and keep that meaning across every field.
Income received over the hold ($) (example value 1,125) is a quantity rather than a category — precision here is cheap and worth having. If your source quotes a figure before and after some deduction, decide which one the formula wants and be consistent for every field.
The default LEAP Return calculation, written out in full
The tool prints its own working; this is the same arithmetic on the example values, reproduced so you can follow it by hand. Starting figures: Buy price / invested ($), Sell price / value now ($), Holding period (years), Income received over the hold ($). Run to the end, the total return resolves to 241.29% — Strong annualised gain — well above broad-market history on the bands this tool uses.
- Ending value incl. income = $29,250.00 + $1,125.00 = $30,375.00
- Total return = (30,375.00 − 8,900.00) ÷ 8,900.00 = 241.29 %
- CAGR = (30,375.00 ÷ 8,900.00)^(1/8.0) − 1 = 16.58 % a year
Annualised (CAGR) — 16.58%. If your inputs change, this is usually the first companion figure to move.
Net profit — $21,475.00. Compare it against the main result of 241.29% before drawing conclusions.
Value multiple — 3.41 ×. If your inputs change, this is usually the first companion figure to move.
Income share of gain — 5.2%. Compare it against the main result of 241.29% before drawing conclusions.
Keep this worked example open while you enter your own figures: matching the shape of the substitution is the fastest way to spot a unit or convention mistake.
The LEAP Return corridor: your result across a realistic band
Read this table as the practical error bar on the headline figure. It answers the question people actually have after seeing a single number: how wrong could this be if the main input is off by ten or twenty percent?
| Buy price / invested setting | Total return |
|---|---|
| 80 % of the example value | 326.62% |
| 90 % of the example value | 279.21% |
| example inputs | 241.29% |
| 110 % of the example value | 210.27% |
| 120 % of the example value | 184.41% |
That spread — 184.41% at the low end, 326.62% at the high — is what a careful read of LEAP Return looks like: a band you can state out loud, with the reason for each edge. Reproduce it in the form above by editing Buy price / invested alone; the substitution steps will follow your figures exactly.
What actually moves your LEAP Return
Nobody should have to guess which input matters. The engine was re-run once per field below — ten percent up, ten percent down, everything else frozen — and the results ranked by how far they moved the total return. Read it as a map of where LEAP Return is fragile — drawn for the example inputs, which is the map you want when deciding what to measure carefully.
- Buy price / invested +10 % → LEAP Return = 210.27% · −10 % → 279.21% (the total return shifts ≈15.7 %)
- Nudge Sell price / value now by ±10 % and LEAP Return lands between 208.43% and 274.16% (sensitivity ≈13.6 %)
- Income received over the hold: ten percent up gives 242.56%, ten percent down gives 240.03% — ≈0.5 % of the total return either way
Buy price / invested is the dominant lever here: ten percent either way moves the result by about 15.7 %, from 210.27% to 279.21%. Spend your verification effort there first, and treat Sell price / value now as the second priority (≈13.6 % per ten percent). Everything below that can stay approximate, which is a licence to stop chasing data that would not change the decision.
Reading the result: bands, zones and thresholds
A number on its own is trivia; a number against a range is intelligence. On the example inputs the band reads “Strong annualised gain — well above broad-market history”; your own figures place you on a different rung of the same ladder. Before treating the band as fact, note its width: ten percent either way on Buy price / invested already spans 210.27% to 279.21%. The practical reading rules: compare against your own history before comparing against other people; treat band boundaries as zones, not walls — one point on the wrong side of a threshold rarely changes a real outcome; and when a companion output contradicts the headline, believe the pair.
Where LEAP Return sits next to similar measures: this tool answers “how much is the LEAP Return”, while the related calculators answer “what do I do about it”. Reading the result alone tends to over-weight a single snapshot; pairing it with the companion tools above turns the number into a decision.
The errors that quietly break an LEAP Return figure
Ignoring the timing of income (reinvested vs spent) can overstate a CAGR by a few tenths; dividends spent as cash belong outside the ending value. This calculator gives an estimate based on standard formulas; it is not professional financial, medical, legal or engineering advice. Verify anything you plan to act on with a qualified professional and your own records.
Reporting the headline and quietly discarding Annualised (CAGR). The companions are where the shape of the trade-off survives the rounding.
Attention is also misallocated between fields. Having measured this engine, we can say where it belongs: Buy price / invested first, everything else second.
Another is comparing across contexts: an LEAP Return computed with one set of conventions should never be lined up against a figure computed with another. Check the inputs behind both before ranking them.
Before you trust your LEAP Return: a short checklist
- Compare the result with one independent method or published benchmark.
- Re-run the calculation with a ±10 % stress on the two most sensitive inputs.
- Put Buy price / invested under a magnifier; the sensitivity table above is the reason why.
- Note the date and the inputs beside the number so the figure can be audited later.
- Confirm the example values are plausible for your own situation before replacing them.
- Repeat the ±10 % test on the inputs that matter and see whether the decision — not just the number — still holds.
A routine for decision-grade LEAP Return
Using a calculator well sounds trivial, but the difference between a decision-grade figure and a throwaway one lives entirely in the routine. The routine for LEAP Return takes a minute to learn and applies to every input above.
Step 1 — one document, one pass. Open the statement, label or record that holds buy price / invested ($), sell price / value now ($), holding period (years), income received over the hold ($) and transcribe straight into the form. Transcription from a single source removes the mismatch errors that appear when figures are assembled from three different places. Note the assumption you are least sure about; that is where the real risk lives.
Step 2 — baseline before exploration. Get one defensible Total return on screen before you start nudging numbers. Without a baseline, every variation looks interesting and none of them means anything. Note the assumption you are least sure about; that is where the real risk lives.
Step 3 — measure what deserves measuring. The ranked levers above tell you where a careful figure pays off. Everything else can stay approximate, which is a licence to stop hunting for data you do not need. The inputs are the part of the work that nobody else can do for you.
Step 4 — ask what would have to be true. Take the result you want and work backwards through the inputs until you find the assumption that produces it; then decide honestly whether that assumption is defensible. Comparisons are cheap: run the identical calculation for the alternative and look at the gap.
Step 5 — record the context, not just the number. Note today’s date and the inputs alongside the 241.29% output. Six months from now the context is what turns this figure into a trend. A calculation you cannot explain to somebody else is a calculation you cannot defend.
Where LEAP Return matters in practice
Investing & Markets arguments end at arithmetic or they do not end. LEAP Return is the arithmetic: 241.29% on the example inputs, reproducible by anyone who types the same numbers. Precision is a promise you make about your data; make sure your inputs can keep it.
The audience for this page is investors and founders comparing opportunities on equal terms. In professional Options & Derivatives practice the pattern is always the same — screen with LEAP Return, then invest slow analysis only in whatever survives the screen. Compare the calculation to the rough guess you arrived with, and ask why they differ.
Nothing here is stored or transmitted, so the habit of checking is free: open the page, re-enter current figures, compare with the number you saved last time. Rounding early is the quietest way to introduce a permanent error.
The questions that come up most about LEAP Return
What affects LEAP Return the most?
LEAP Return is driven above all by Buy price / invested. Perturbing only that field by ten percent either way produced 210.27% against the 241.29% baseline — a ≈15.7 % response, while Sell price / value now manages ≈13.6 %.
Which matters more: sell price / value now or buy price / invested?
For LEAP Return, Buy price / invested wins the head-to-head (≈15.7 % against ≈13.6 % per ten-percent change). Knowing which input dominates is the difference between careful work and merely slow work.
What is a typical LEAP Return?
On the worked example above LEAP Return comes out at 241.29%. Treat that as one point on a distribution rather than a norm: the bands, the companion outputs and the sensitivity ranking tell you how wide the plausible range really is.
How do I calculate LEAP Return by hand?
Use the stated model — Total return = (sell + income − buy) ÷ buy; CAGR = ((sell + income) ÷ buy)^(1/years) − 1 — and substitute in the order the tool prints (it starts from Ending value incl. income = $29,250.00 + $1,125.00 = $30,375.00). On the example inputs the hand route lands on 241.29%, exactly what the calculator shows. A spreadsheet reproduces it in two or three cells; doing it once by hand is what makes the automated answer trustworthy.
What happens to LEAP Return if buy price / invested changes by 10 %?
The engine was re-run with that field moved by ten percent while everything else stayed fixed: the total return goes across 210.27% to 279.21%, a swing of roughly 15.7 % around the 241.29% baseline. That ratio is the practical definition of how much this input matters.
Is the LEAP Return result of 241.29% good or bad?
The tool answers “what”, not “whether”: 241.29% carries the verdict “Strong annualised gain — well above broad-market history” for the default case, which is a starting interpretation rather than a verdict on your situation. Re-run with your own figures and compare the bands.
Does LEAP Return account for fees and taxes?
Only what you put in. Fees belong inside Buy price / invested ($) where they shrink returns before compounding touches them; taxes are outside the scope of a pre-tax LEAP Return and should be layered on top before decisions.
How often should I check LEAP Return?
Whenever an input changes by more than a few percent, and otherwise on the rhythm of your decisions — before a purchase, a review, a renewal. LEAP Return is a snapshot, not a subscription; stale snapshots are the most common silent error in Investing & Markets planning.
Why does CAGR differ from average yearly return?
CAGR compounds — it is the single steady rate that turns the start into the end, while arithmetic averages flatter volatile paths.
Are taxes included?
No, this is the pre-tax picture; subtract tax drag on gains and income before comparing with a tax-sheltered alternative.
Does this LEAP Return tool store my numbers?
No. The entire calculation runs in your browser session; nothing entered above is transmitted or saved, which is the correct behaviour for sensitive Investing & Markets figures and the reason you can re-run this page as often as you like.
Glossary for LEAP Return
- Annualised (CAGR)
- 16.58% in the default LEAP Return calculation — one of the secondary figures an experienced reader checks before trusting the primary number.
- Net profit
- $21,475.00 in the default LEAP Return calculation — one of the secondary figures an experienced reader checks before trusting the primary number.
- Value multiple
- 3.41 × on the example inputs — a companion figure printed beside the headline of LEAP Return so that no result is read in isolation.
- Total return
- The primary output of this tool: 241.29% for the default inputs, computed exactly from Total return = (sell + income − buy) ÷ buy; CAGR = ((sell + income) ÷ buy)^(1/years) − 1.
- Worked example
- Every substitution in order, from the example inputs to 241.29% — the audit trail for the headline figure.
- Verdict band
- The plain-language label — here “Strong annualised gain — well above broad-market history” — mapping the computed figure onto experience-based ranges for Investing & Markets.
- Sensitivity (±10 %)
- How far the LEAP Return moves when a single input is nudged ten percent either way; the ranked list on this page is computed live from this engine.
Method, sources and what this tool cannot tell you
Everything above runs on one stated formula, applied without hidden coefficients: Total return = (sell + income − buy) ÷ buy; CAGR = ((sell + income) ÷ buy)^(1/years) − 1. Source of record: Time-weighted return arithmetic per CFA Institute conventions. Any other implementation of this model should return the same figure for the same inputs. If one does not, the difference is in its assumptions — which this page prints and that one probably does not.
Nothing here replaces a qualified professional, and nothing here is approximate either — the arithmetic is exact, and the honesty is in the inputs you supply. What that buys you is reproducibility — two people, two browsers, the same arithmetic, and a printed trail from inputs to result that either of them can audit.
After the number: what to do with it
Run the pessimistic case before the optimistic one; an opportunity that survives the pessimistic inputs is the only kind worth pursuing.
This page was written for investors and founders comparing opportunities on equal terms, and the promise is that nothing above required trust. Bookmark the tool, re-run it whenever an input moves by more than a few percent, and keep the date with the number.