ROI Calculator
Calculate total return on investment and annualised rate (CAGR) for any investment.
What is ROI and how is it calculated?
Return on Investment (ROI) measures the gain or loss on an investment relative to the amount invested: ROI = (Final Value − Initial Investment) ÷ Initial Investment × 100. A 50% ROI means you gained 50% on top of your original investment. ROI is a simple metric that works for any type of investment — stocks, property, business capital, or even education and training.
Frequently asked questions
What is CAGR and how is it different from ROI?
CAGR (Compound Annual Growth Rate) is the annualised ROI — it tells you the equivalent annual growth rate that would produce the same total return. It's calculated as: CAGR = (Final ÷ Initial)^(1÷years) − 1. A 50% total ROI over 3 years is a CAGR of about 14.5% per year, not 16.7% — because compounding means each year's gain builds on the previous.
Why is ROI not always a complete picture?
ROI doesn't account for the time value of money, risk, or opportunity cost. A 20% ROI over 10 years is far less impressive than a 20% ROI over 1 year. CAGR addresses the time problem. Risk-adjusted metrics like the Sharpe Ratio address the risk problem. For business investments, net present value (NPV) accounts for both time and discount rate.
Can ROI be negative?
Yes — a negative ROI means the investment lost money. If you invested $10,000 and the final value is $8,000, the ROI is −20%. The calculator shows negative returns in red and displays the loss amount. A negative CAGR means the investment declined at that annualised rate over the period.
