How to use the ROI calculator
- Enter your numbers. Fill in amount invested, final value, years held.
- Read your results. Results update instantly. The headline shows the return on investment (ROI); the breakdown below show the details.
The formulas
CAGR = (final ÷ initial)1 ÷ years − 1
ROI tells you the total percentage gain or loss. CAGR (compound annual growth rate) converts it into the steady yearly rate that would produce the same result, which makes investments held for different lengths of time comparable.
Worked example
$10,000 that becomes $16,500 has an ROI of 65%. Over 4 years, that’s a CAGR of 13.3% a year; over 10 years, only 5.1%.
Include everything
Include dividends or rent received in the final value, and subtract fees, commissions and taxes from it if you want a net return. For investments with additional deposits over time, a money-weighted return (IRR) is more accurate than CAGR.
Worked example
With these inputs: amount invested $10,000; final value (incl. income received) $16,500; years held (for CAGR) 4.
The calculator gives a return on investment (ROI) of 65.00% (gain of $6,500). Other results: annualized return (CAGR) 13.34%, gain or loss $6,500, growth multiple 1.65×.
What your results mean
ROI is your total gain or loss as a percentage of what you put in. CAGR spreads it over the holding period as a yearly compound rate, so you can compare it with other investments.
Tips
- Compare annualized returns, not total returns, across different time spans.
- Include income received and subtract costs.
- Consider risk alongside return.
Frequently asked questions
How do I calculate ROI?
Subtract the cost from the final value, divide by the cost, and multiply by 100.
How do I calculate annualized return?
Divide final value by initial value, raise to the power 1 ÷ years, subtract 1.
What is a good ROI?
It depends on risk. Broad U.S. stock indexes have returned roughly 10% a year nominal over long periods, with large swings; insured savings far less with no risk to principal.
What is the difference between ROI and CAGR?
ROI is total return; CAGR is the equivalent annual compound rate.
Can ROI be negative?
Yes, if the final value is less than the amount invested.
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