Business & CommerceInvestments
Return on Investment (ROI) & CAGR Calculator
Measure the profitability of your investments. Computes total percentage ROI, net profit gain, and annualized Compound Annual Growth Rate (CAGR).
Investment Performance
Total Return on Investment (ROI)
90%
Net Profit Gain: +$18,000.00
Annualized Return (CAGR):13.7% per year
Holding Duration:5 Years
Mathematical Formula: Total ROI & CAGR Formulas
ROI = [(Final - Initial) / Initial] × 100 | CAGR = (Final / Initial)^(1/t) - 1
Measures total return and time-normalized annualized compound growth over t years.
How to Use This Calculator
- 1Enter the initial capital invested.
- 2Enter the ending total value returned.
- 3Enter the investment holding duration in years.
- 4See total dollar gain, total percentage ROI, and annualized CAGR.
Practical Example: 5-Year Stock Portfolio Return
Scenario: Investing $20,000 and selling 5 years later for $38,000.
Initial Cost:$20,000
Final Value:$38,000
Years:5.0
Result: Net Profit: $18,000.00 | Total ROI: 90.00% | Annualized CAGR: 13.70% per year
A 90% total return over 5 years corresponds to an outstanding 13.7% compound growth rate per annum.
Frequently Asked Questions
ROI measures the total percentage gain regardless of how long it took, while CAGR calculates the steady annual growth rate required to achieve that result over time.
Pro Calculation Tips
- Always compare annualized CAGR rather than total ROI when benchmarking investments with different holding periods.
Model Assumptions
- Does not factor in transaction brokerage fees, ongoing dividend reinvestment timing, or taxes.