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This calculator calculates both the annualized rate of return on an investment liquidated on a specified date and the gross rate of return. Enter the amount initially invested and the investment date (Start Date). Then the amount returned and the date the investment was liquidated (End Date).
The annualize return is a simple rate of return, that is, it assumes no compounding. What is important is that when you compare the result you get with this calculator to results from other sources, that they were made using the same assumption.
Example: As this is being written bonds are yielding about 6%. Suppose you had an investment opportunity that required you to make an initial investment of $10,000 (amount invested) and after 3 years you were to receive back (amount returned) $12,500. If you want to see if this compares favorably with a 6% bond you would compare the resulting "Annualized Return on Investment" to 6%. If the resulting interest rate earned is greater than the coupon rate of a bond, then you know the proposed investment is better than the bond (excluding risk, of course).