How It Works
ROI compares your gain (or loss) to your original investment as a percentage. On its own, ROI doesn't account for how long you held the investment — a 20% return over 1 year is very different from a 20% return over 10 years.
If you enter a time period, this calculator also shows the annualized return (CAGR — compound annual growth rate), which converts your total return into an equivalent steady yearly rate, making it easier to compare investments held for different lengths of time.
Formula
- Initial — Initial investment amount
- Final — Final or current value
- years — Time the investment was held
Example
Example inputs: Initial investment $10,000, final value $14,500, held 3 years.
Result: Net gain: $4,500.00. ROI: 45%. Annualized return (CAGR): 13.19%.
Frequently Asked Questions
What's the difference between ROI and CAGR?
ROI is your total return over the whole period. CAGR spreads that same total return evenly across each year, so you can compare investments held for different lengths of time on equal footing.
Does ROI account for risk?
No — ROI only measures the return you got, not how much risk was involved in getting it. Two investments with the same ROI can carry very different levels of risk.
Can I use this for an investment I still hold?
Yes — enter its current value as the 'final value' to see your return so far, and how long you've held it for an annualized figure.
This calculator provides estimates for informational purposes only and should not be considered financial, tax, or legal advice.