ROI Calculator — Calculate Return on Investment

Enter your initial investment and final value to instantly calculate ROI, annualized return (CAGR), and profit. Compare two investments side by side.

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Initial Investment ($)

Final Value ($)

Time Period (Years)

ROI

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CAGR (Annualized)

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Total Return

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Profit

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ROI = (Final Value - Initial) / Initial x 100

How to Use the ROI Calculator

Enter your initial investment amount, the final value of your investment, and the time period in years. The calculator instantly shows your return on investment (ROI), compound annual growth rate (CAGR), total return in dollars, and net profit. Use Compare Investments mode to evaluate two investments side by side.

Initial Investment — the total amount of money you put in at the start.
Final Value — the current or ending value of your investment, including any gains or losses.
Time Period — the number of years you held the investment. Decimals work (e.g. 2.5 for two and a half years).
Compare mode — switch tabs to enter two investments and see which delivered better returns.
Copy Result — copies a clean text summary to your clipboard for sharing.

How ROI is Calculated

Return on Investment (ROI) measures the profitability of an investment as a percentage of the original cost. The formula is:

ROI = (Final Value - Initial Investment) / Initial Investment x 100

For example, if you invest $10,000 and your investment grows to $15,000, the ROI is ($15,000 - $10,000) / $10,000 x 100 = 50%. A positive ROI means you made money; a negative ROI means you lost money.

What is CAGR?

CAGR (Compound Annual Growth Rate) is the annualized rate of return that smooths out year-to-year fluctuations. It tells you what your investment would have earned each year if it had grown at a steady rate. The formula is:

CAGR = ((Final Value / Initial Investment) ^ (1 / Years)) - 1

CAGR is especially useful when comparing investments held for different lengths of time. A 50% total ROI over 10 years is very different from 50% over 2 years. CAGR makes them directly comparable by normalizing to an annual rate.

ROI vs CAGR

Metric	Measures	Best For	Limitation
ROI	Total return as a percentage	Quick snapshot of profitability	Does not account for time
CAGR	Annualized growth rate	Comparing investments over different periods	Assumes steady compounding

Common Investment Scenarios

Scenario	Initial	Final	Years	ROI	CAGR
S&P 500 (historical avg)	$10,000	$25,937	10	159.4%	10%
Real estate rental	$50,000	$80,000	5	60%	9.86%
High-yield savings	$10,000	$12,763	5	27.6%	5%
Startup investment	$5,000	$50,000	7	900%	38.95%
Bond portfolio	$20,000	$24,000	4	20%	4.66%

Frequently Asked Questions

What is ROI?

ROI (Return on Investment) is a financial metric that measures the profitability of an investment. It is calculated as (Final Value - Initial Investment) / Initial Investment x 100, expressed as a percentage.

What is a good ROI?

A good ROI depends on the investment type. For stocks, an average annual return of 7-10% after inflation is considered solid. Real estate typically targets 8-12%. Any ROI above the risk-free rate (Treasury bonds) is generally considered acceptable.

What is the difference between ROI and CAGR?

ROI measures the total return over the entire period as a single percentage. CAGR (Compound Annual Growth Rate) shows the smoothed annual rate of return, accounting for compounding. CAGR is better for comparing investments held over different time periods.

How do I calculate annualized ROI (CAGR)?

CAGR is calculated using the formula: ((Final Value / Initial Investment) ^ (1 / Years)) - 1. This gives you the equivalent annual growth rate that would produce the same total return over the investment period.

Can ROI be negative?

Yes. A negative ROI means you lost money on the investment. For example, if you invested $10,000 and the final value is $8,000, your ROI is -20%. This indicates a $2,000 loss.

Does this ROI calculator account for fees and taxes?

This calculator computes raw ROI based on initial investment and final value. To account for fees, subtract them from the final value before entering it. For after-tax returns, use your after-tax final proceeds.

How do I compare two investments?

Use the Compare Investments mode to enter details for two investments side by side. The calculator shows ROI and CAGR for both, highlighting which performed better overall and on an annualized basis.

What is a realistic ROI for the S&P 500?

The S&P 500 has historically returned an average of about 10% per year before inflation, or roughly 7% after inflation. However, actual returns vary widely from year to year.