ROI Calculator
Calculate the return on an investment — total gain, total return as a percentage, and the annualized growth rate (CAGR) that makes the start and end value comparable across different time periods.
How to use the calculator
- Enter what the investment was worth when you started.
- Enter what it's worth today (or at a given point in time).
- Enter how many years have passed between the two values.
How it's calculated
CAGR = (ending value / starting value)^(1/years) − 1
Worked example: $100,000 that becomes $150,000 over 5 years is an ROI of (150,000 − 100,000) ÷ 100,000 = 50 %. The annual return is not 50 % ÷ 5 = 10 % but (150,000 ÷ 100,000)^(1/5) − 1 = 8.45 %. The difference arises because each year's return builds on a larger base, and it is the CAGR figure that lets you compare investments of different lengths.
Total return shows how much your money has grown as a percentage over the whole period. CAGR (Compound Annual Growth Rate) converts this into a smooth, comparable annual growth rate — useful for comparing investments with different time horizons.
Total return and annual return are not comparable
A return of 50 % says nothing until you know over what period. Fifty percent over two years and fifty percent over ten are very different investments, which is exactly why annualised return exists as a separate measure. To compare two investments of different durations, both have to be converted to an annual rate — otherwise the comparison systematically favours whichever one had longer to run.
Annual return is also calculated geometrically, not by dividing the total by the number of years. The reason is that returns compound: fifty percent over two years is not twenty-five percent a year but slightly over twenty-two, because the second year grows from a higher base. See the compound interest calculator for the same mechanism from the savings side.
Frequently asked questions
What's the difference between total return and CAGR?
Total return is the combined percentage growth over the whole period. CAGR is the annual growth rate that, compounded over the same number of years, produces exactly that total return — it makes different time periods comparable.
Can the ROI be negative?
Yes, if the ending value is lower than the starting value. Gain and CAGR are then shown as negative numbers, representing an actual loss.
Does this work for stocks, funds, and real estate?
Yes, the formula is general and works for any investment where you know the starting and ending value.