ROI Calculator

Calculate return on investment as total ROI and annualized CAGR. Compare simple vs compound returns.

By Konstantin Iakovlev · Updated September 2026 · Source: SEC

$
Input Method
$
years

Total ROI

50.00%

Annualized Return (CAGR)

8.45%

Dollar Gain

$5,000.00

ROI Breakdown

Initial Investment$10,000.00
Final Value$15,000.00
Dollar Gain/Loss$5,000.00
Total ROI50.00%
Annualized Return (CAGR)8.45%

Simple vs Compound Comparison

Simple Annual Return

10.00%

Compound Annual Return (CAGR)

8.45%

Use the ROI Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Two numbers tell you most of what you need to know about an investment's performance, and this tool reports both: total ROI and the annualized Compound Annual Growth Rate (CAGR). Together they let you judge how well your money has worked and compare opportunities on an even footing.

Total ROI comes from (Current Value - Initial Investment) / Initial Investment * 100%, capturing the full gain or loss as a percentage. Annualized CAGR uses ((Current Value / Initial Investment)^(1 / Number of Years)) - 1, which spreads that result across the holding period. Reporting both separates a simple return from a compound one and gives you the complete picture.

The trap to avoid is reading total ROI as if it were an annual figure; it ignores how long the money was invested, so a large total over many years can be a modest yearly rate. It also helps to think in real terms: a 5% nominal return shrinks to a 2% real return once you account for 3% inflation.

Example: Stock Investment

  1. 1 Imagine you invested $10,000 in a tech stock on January 1, 2023. By January 1, 2026, the stock is worth $13,500.
  2. 2 Initial Investment: $10,000. Current Value: $13,500. Number of Years: 3.
  3. 3 Total ROI = ($13,500 - $10,000) / $10,000 * 100% = 35%. Annualized CAGR = (($13,500 / $10,000)^(1/3)) - 1 = 10.52%.
  4. 4 This means your investment grew by 35% over three years, which averages out to an annual compound growth rate of 10.52%. The calculator also shows a simple annual return of 11.67% (35% / 3), which overstates the yearly pace because it ignores compounding. Whether 10.52% is good depends on what the same money could have earned elsewhere over those three years.

Source: SEC · Last updated: September 2026

Frequently Asked Questions

How do I calculate return on investment?
ROI = (Final Value - Initial Investment) / Initial Investment x 100. If you invested $10,000 and it is now worth $15,000, your ROI is 50%. For time-adjusted comparison, use annualized return (CAGR).
What is the difference between ROI and CAGR?
ROI is the total percentage return regardless of time. CAGR (Compound Annual Growth Rate) is the annualized return that smooths out volatility. A 100% ROI over 10 years equals about a 7.2% CAGR.
What is a good ROI?
A good ROI depends on the asset class. The S&P 500 averages about 10% annually before inflation. Real estate typically returns 8-12% including appreciation and rental income. Anything above the risk-free rate (Treasury yields) can be considered positive.

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