ROI Calculator
Calculate return on investment, annualized ROI (CAGR), and compare multiple investments side by side.
| Investment | Amount | Return | ROI | CAGR |
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Calculate return on investment and annualized ROI (CAGR), and compare multiple investments side by side.
How ROI Calculator Works
Simple ROI is calculated as (Final Value − Investment) ÷ Investment × 100, expressing your total gain or loss as a percentage of what you originally put in, regardless of how long the investment was held.
Because a 45% return over one year is very different from a 45% return over ten years, the calculator also computes an annualized ROI (CAGR) using CAGR = [(Final Value ÷ Investment)^(1/Years) − 1] × 100, which converts your total return into an equivalent constant annual growth rate — making it possible to fairly compare investments held for different lengths of time.
The comparison table runs the same ROI and CAGR calculations across several investments side by side, which is useful for ranking opportunities that may have very different investment sizes, returns, and holding periods.
See It In Action
Who Uses ROI Calculator and Why
- Calculating the total percentage return on a completed or hypothetical investment from its starting and ending value.
- Converting a multi-year total return into an annualized CAGR figure to compare against other investments\' quoted annual returns.
- Comparing several different investments with different holding periods using the built-in comparison table.
- Checking whether a smaller total ROI on a shorter holding period actually outperforms a larger total ROI on a longer one, once annualized.
Mistakes to Avoid
- Comparing raw ROI percentages across investments held for very different lengths of time — a 45% return over 10 years is a very different result than a 45% return over 1 year, and only CAGR properly normalizes that difference.
- Using this calculator for an investment with multiple contributions or withdrawals over time — it measures the return between a single initial investment and a single final value; for cash flows that occur at different times, IRR is the more appropriate metric.
- Forgetting that a negative final value relative to the investment produces a negative ROI and CAGR — both figures correctly reflect a loss, they don\'t floor at zero.
Tips for Best Results
- Always compare CAGR, not simple ROI, when the investments you\'re comparing were held for different lengths of time — it\'s the only figure in this calculator that\'s directly comparable across different holding periods.
- Use the comparison table to rank several potential investments side by side rather than calculating each one separately and comparing by hand.
Fixing Common Problems
My ROI looks strong but the CAGR seems unimpressive. — This usually means the return was earned over a long holding period — a large total ROI spread across many years annualizes down to a more modest CAGR, which is a more accurate reflection of the investment\'s year-over-year growth rate.
Terms Explained
Simple ROI: Total gain or loss as a percentage of the original investment, regardless of how long the money was held.
CAGR (Compound Annual Growth Rate): Your total ROI converted into an equivalent constant annual growth rate, making returns comparable across different holding periods.