ROI Calculator
Calculate return on investment, annualized ROI, and profit/loss for any investment.
Before you calculate
Annualized ROI assumes one starting investment and one ending value. Intermediate deposits, withdrawals, taxes and fees require a cash-flow return model.
ROI vs. Annualized Return (CAGR)
ROI is a simple measure of total gain relative to cost. CAGR (Compound Annual Growth Rate) normalizes ROI over a time period, showing what constant annual return would produce the same result — making it better for comparing investments.
ROI = (Final Value − Initial Investment) / Initial Investment × 100% | CAGR = (Final / Initial)^(1/Years) − 1Example Scenarios
Stock Investment Over 5 Years
Investing $10,000 in a stock that grows to $15,000 over 5 years yields a 50% ROI, but only an 8.45% CAGR. This is a useful correction — a 50% gain sounds great, but 8.45%/year is a more useful comparison against alternatives.
Short vs. Long Duration Investments
A 20% ROI in 1 year (20% CAGR) significantly outperforms a 20% ROI over 5 years (3.71% CAGR). ROI alone can mislead — always consider the time dimension when evaluating investment performance.
Methodology & Assumptions
ROI is computed as (netProfit / initialInvestment) × 100. Annualized ROI uses the CAGR formula: (finalValue / initialInvestment)^(1/years) − 1. Net profit is finalValue − initialInvestment.
Sources & calculation notes
Maintained by MoneyCalc. Results are estimates based on the inputs and assumptions shown, not personalized financial advice or a lender quote. Default rates are examples unless a specific tax year or official table is identified.
References explain the underlying concepts or rules. They do not endorse or independently certify this implementation.
Calculations run in your browser. Some tools retain settings on this device. Displayed rounding can produce small differences from a statement or contract.