This ROI calculator works out the ROI and annualized return (CAGR) of an investment from its initial value, final value and time.
ROI and annualized return
ROI (return on investment) tells you how much you’ve gained in total relative to what you put in. But gaining 60% in one year isn’t the same as gaining it over ten — that’s why it’s also worth looking at CAGR, the compound average annual return.
Example: 10,000 to 16,000 in 5 years
An investment that goes from 10,000 to 16,000 over 5 years has a total ROI of 60% and a CAGR of roughly 9.9% a year. CAGR is the figure that lets you compare it fairly against other investments.
For guidance only — gross nominal return. It doesn’t account for inflation, taxes or fees. Not financial advice.
FAQ
What's the difference between ROI and CAGR?
ROI is the total gain relative to what you invested, without accounting for time. CAGR is the compound average annual return: the constant percentage that, year after year, takes the initial investment to the final value. To compare investments of different lengths, CAGR is fairer.
How is CAGR calculated?
It's the n-th root (n = number of years) of the ratio between the final and initial value, minus 1. For example, doubling your money in 5 years is roughly a 14.9% annual CAGR.
Does the result account for taxes or inflation?
No. It's the gross nominal return. For the real return, subtract inflation; for the net return, subtract taxes on the gain and any fees.
Can I use it with a loss?
Yes. If the final value is lower than the initial investment, both ROI and CAGR will be negative, reflecting the loss.
