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ROI Calculator

Calculate return on investment, gain and annualised CAGR

Return on investment (ROI)
+50%
Net gain
+500,000
Annualised return (CAGR)
+8.45%
per year

ROI & CAGR formulas

ROI = (Final − Initial) / Initial × 100
CAGR = ((Final / Initial)^(1 / years) − 1) × 100

ROI is the total gain relative to what you invested. CAGR turns a multi-year return into an equivalent steady annual rate so investments of different lengths can be compared.

What is an ROI calculator?

Return on investment (ROI) measures how much an investment gained or lost relative to what you put in, expressed as a percentage. It is the most common way to compare the profitability of very different things — a stock, a property, a marketing campaign or a side project — on the same simple scale. This calculator takes the amount you initially invested and the final value (or the profit), and reports both the money gained or lost and the ROI percentage. If you also enter how long you held the investment, it works out the compound annual growth rate (CAGR), which turns a multi-year return into a single yearly figure you can fairly compare against other annual rates.

How to use it

1. Enter the amount you initially invested. 2. Enter the final value of the investment (what it is worth now, or what you sold it for). 3. Optionally tick the holding-period box and enter how many years you held it. The ROI percentage and the gain or loss appear instantly. With a holding period set, the annualised CAGR is shown too, so you can compare investments held for different lengths of time.

Formula and definition

Simple ROI is the gain divided by the amount invested: ROI (%) = (Final value − Initial investment) / Initial investment × 100 The gain (or loss, if negative) is simply Final − Initial. When you hold an investment over several years, the annualised return is the compound annual growth rate: CAGR (%) = ((Final / Initial)^(1 / years) − 1) × 100 For example, turning 1,000,000 into 1,500,000 is a 50% ROI; over 5 years that is a CAGR of about 8.45% per year.

Reading your results

A positive ROI means the investment grew; a negative one means it lost value. ROI on its own ignores time, so a 50% return is impressive over one year but ordinary over twenty — which is why the annualised CAGR matters for fair comparison. CAGR describes a smoothed, constant yearly growth rate; real returns are rarely that steady, and a high CAGR can hide volatile years. Simple ROI also ignores additional contributions, fees, taxes and dividends unless you fold them into the figures you enter. Use ROI to gauge overall result and CAGR to compare investments held over different periods.

Frequently asked questions

What counts as a good ROI? ▾

It depends entirely on the asset, the risk and the time involved. A 'good' return on a low-risk savings product is very different from a venture investment. Always compare ROI against the risk taken and, for multi-year holdings, look at the annualised CAGR rather than the raw percentage.

What is the difference between ROI and CAGR? ▾

ROI is the total return over the whole period regardless of how long it took. CAGR converts that total into an equivalent steady yearly rate, so you can compare investments held for different lengths of time on the same annual basis.

Can ROI be negative? ▾

Yes. If the final value is less than the initial investment, the gain is negative and so is the ROI — that is a loss. This calculator shows the loss amount and a negative percentage.

Does this include fees, taxes or extra contributions? ▾

No. The calculation uses only the initial and final amounts you enter. To reflect costs, subtract fees and taxes from the final value, and if you added money along the way, ROI alone will overstate performance — a money-weighted return would be more accurate.

This calculator is for general educational purposes only and is not financial or investment advice. ROI and CAGR are simplified measures that ignore fees, taxes, additional contributions and risk. Past performance does not guarantee future results. Consult a qualified professional before making investment decisions.