Finance

ROI Calculator — Total Return & Annualized Rate (CAGR)

Calculate ROI instantly: enter your initial investment and final value to get total return on investment %, net profit, and annualized ROI (CAGR). Free, no sign-up.

  • U.S. Securities and Exchange Commission data · June 2026
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Return on investment (ROI) is the most-quoted number in finance — but a raw 50% ROI means very different things over 1 year versus 10. This calculator gives you both: total ROI and, when you add a holding period, annualized ROI (CAGR) — the only fair way to compare investments held for different lengths of time.

When to use this calculator

  • Measuring total return on a stock, fund, or property sale
  • Comparing investments held for different periods using annualized ROI
  • Evaluating a marketing campaign spend against the revenue it produced
  • Checking whether a side investment beat a simple index fund
  • Translating a multi-year gain into an equivalent per-year rate
  • Sanity-checking a 'double your money' claim against the time it took

CAGR vs. Total ROI: What a Steady Annual Rate Compounds To

Annualized ROI (CAGR)Total ROI after 1 yrTotal ROI after 5 yrTotal ROI after 10 yrTotal ROI after 20 yr
3%3%16%34%81%
5%5%28%63%165%
7%7%40%97%287%
10%10%61%159%573%
15%15%101%305%1,537%
20%20%149%519%3,734%

Fuente: U.S. Securities and Exchange Commission — Investor.gov / CFA Institute GIPS Standards (2026). CAGR = (Final Value / Initial Investment)^(1/years) − 1. A 159% total ROI over 10 years equals a 10% CAGR; always annualize before comparing investments held for different periods.

How it works

What is ROI?

Return on investment (ROI) measures how much an investment gained or lost relative to its cost. Total ROI is net profit as a percentage of the initial investment. Annualized ROI (CAGR — compound annual growth rate) converts total ROI into an equivalent steady yearly rate, so investments held for different periods can be compared fairly.

ROI Formula

Net Profit    = Final Value − Initial Investment
ROI (%)       = Net Profit / Initial Investment × 100

// Annualized ROI (CAGR), when years > 0:
CAGR (%)      = ((Final Value / Initial Investment)^(1 / years) − 1) × 100

Worked Example

$1,000 grows to $1,500 over 2 years:

MetricCalculationResult
Net profit$1,500 − $1,000$500.00
Total ROI$500 / $1,000 × 10050.00%
Annualized (CAGR)(1.5)^(1/2) − 122.47% / yr

> 50% over 2 years is not 25%/year — compounding makes the annualized rate 22.47%.

Quick Reference: Common ROI Scenarios

InitialFinalNet ProfitTotal ROI1-yr CAGR2-yr CAGR5-yr CAGR
$1,000$1,100$10010%10.00%4.88%1.92%
$1,000$1,500$50050%50.00%22.47%8.45%
$1,000$2,000$1,000100%100.00%41.42%14.87%
$1,000$3,000$2,000200%200.00%73.21%24.57%
$5,000$6,500$1,50030%30.00%13.94%5.39%
$10,000$15,000$5,00050%50.00%22.47%8.45%

CAGR = compound annual growth rate. Enter your own numbers in the calculator above.

Same CAGR, very different total ROI over time

A single annualized rate compounds into wildly different total returns depending on how long you hold. This is the table to internalize before judging any "total ROI" headline — a 100% total ROI is spectacular over 1 year and mediocre over 20.

Read it the other way too: a 159% total ROI over 10 years is "only" a 10% CAGR. Always annualize before comparing.

Limitations

  • Basic ROI ignores the timing of cash flows; for investments with multiple deposits/withdrawals, use IRR or money-weighted return.

  • It's a nominal figure — doesn't adjust for inflation. Subtract ~2–3%/yr for a rough real return.

  • Fees, taxes, and dividends should be folded into the initial and final values for an accurate result.

    • Example: $1,000 invested grows to $1,500 over 2 years

    Net profit: $1,500 final value − $1,000 invested = $500 gain.
    ROI: $500 ÷ $1,000 = 0.50, or 50.00% total return.
    Annualized (CAGR): spread over 2 years, (1,500 ÷ 1,000)^(1/2) − 1 = 22.47% per year.
    A 50.00% total ROI, or 22.47% annualized over 2 years, on a $500 net profit. Reference values, adjust as needed.
    Disclaimer: Informational estimate. Actual rates, fees, and terms depend on the provider and contract; compare official documents before deciding.

    Frequently asked questions

    How do I calculate ROI?
    ROI = (Final Value − Initial Investment) / Initial Investment × 100. If you invested $1,000 and it's now worth $1,500, ROI = $500 / $1,000 × 100 = 50%. This calculator also shows net profit and annualized ROI (CAGR).
    What is annualized ROI (CAGR)?
    Annualized ROI — or compound annual growth rate (CAGR) — is the steady yearly rate that would turn your initial investment into the final value over the full holding period. Formula: CAGR = (Final / Initial)^(1 / years) − 1. It's the fair way to compare investments held for different lengths of time.
    Why isn't 50% over 2 years the same as 25% per year?
    Because returns compound. Earning 22.47% in year one and again in year two grows $1,000 to $1,500 (1.2247² ≈ 1.5). A simple 25% + 25% would overstate it. Annualized ROI (22.47%) accounts for this compounding effect.
    What is a good ROI?
    It depends on risk and time horizon. The US stock market has averaged roughly 7–10% annualized over the long run. A good ROI is one that beats a comparable low-risk alternative — after fees, taxes, and inflation. Always compare investments on an annualized (CAGR) basis, not just total return.
    What's the difference between ROI and profit?
    Profit is the absolute dollar gain (final − initial). ROI expresses that gain as a percentage of what you invested, enabling fair comparison across investment sizes. $500 profit is 50% ROI on $1,000 but only 5% ROI on $10,000.
    Does this ROI calculator account for inflation?
    No — it calculates nominal ROI. For a real (inflation-adjusted) return, subtract the average annual inflation rate from the annualized ROI (approximately). For example, 10% nominal CAGR minus 3% inflation ≈ 7% real return.
    Can ROI be negative?
    Yes. If the final value is less than the initial investment, ROI is negative — a loss. Investing $1,000 and ending with $800 is a −20% ROI (−$200 net). The calculator shows the negative sign and labels it a net loss.
    How do I include fees, taxes, and dividends in my ROI?
    For the most accurate result: add all purchase costs and fees to the initial investment, and add any dividends or distributions received to the final value (or subtract taxes and selling fees from it). This gives a net after-cost ROI.
    What is the difference between ROI and IRR?
    ROI is a simple ratio of net profit to cost — it ignores when cash flows happen. IRR (internal rate of return) accounts for the exact timing of each cash inflow and outflow, making it more accurate for projects with multiple cash flows over time. For a single buy-and-sell scenario, ROI and CAGR are sufficient.
    How does this calculator compare to an annualized return calculator?
    This calculator covers both: total ROI and annualized ROI (CAGR). Just enter the holding period in years to get the annualized figure. If years is left blank, only total ROI and net profit are shown.

    Methodology & trust

    Editorial

    Finance calculator with its formula verified automatically against U.S. SEC Investor.gov — Compound Interest and Returns, per our editorial policy and methodology.

    Updates

    Updated: June 2026. Parameters are verified periodically against the cited sources.

    Privacy

    Calculations run 100% in your browser. We do not store or transmit your data.

    Limitations

    Indicative results. For critical decisions, consult a professional.

    📌 How to cite this calculator

    Rodríguez, M. (2026). ROI Calculator — Total Return & Annualized Rate (CAGR). Hacé Cuentas. https://hacecuentas.com/en/roi-calculator

    Content licensed under CC-BY 4.0 — reuse it citing the source with a link to Hacé Cuentas.

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