ROI Calculator
Calculate your return on investment and, with a time period, the annualized growth rate.
How to use
- Enter the amount you invested.
- Enter the final value.
- Add the years held to also see the annualized CAGR.
How the ROI Calculator works
Measures return on an investment as a percentage of what you put in, and annualizes it as a compound growth rate when you supply a holding period.
ROI is the net gain divided by the initial cost. Because a 50% return over one year is far better than the same return over ten, the tool also computes CAGR — the constant annual rate that would produce the same result.
ROI = (final − initial) / initial × 100 CAGR = (final / initial)^(1/years) − 1
Worked example
Turning $10,000 into $15,000 over 3 years is a 50% ROI, but a CAGR of 14.47% a year.
Things worth knowing
- Plain ROI ignores time entirely, which makes it useless for comparing investments of different lengths. Use CAGR for that.
- Neither figure accounts for risk, and neither is inflation-adjusted.
- For anything with cash flows in and out along the way, ROI is too blunt — IRR is the right measure.
Frequently asked questions
What is ROI?
Return on investment — your gain or loss as a percentage of the amount you invested.
What is CAGR?
Compound annual growth rate — the smoothed yearly return that would take you from start to end value.
What counts as a good ROI?
It depends entirely on risk and time frame. The long-run US stock market average of roughly 10% a year is the usual benchmark to beat.
What is the difference between ROI and CAGR?
ROI is total return over the whole period. CAGR expresses that as a smoothed annual rate, which is what makes different holding periods comparable.