Does this account for dividends or extra contributions?

No — it assumes one initial investment and one final value. For a series of contributions over time, the Compound Interest Calculator is a better fit.

Yes — if the final value is lower than what you put in, both ROI and CAGR show as negative, reflecting a loss.

Is CAGR the same as the average annual return?

No — CAGR is the single steady rate that would take you from the initial to the final value over the period, which accounts for compounding. A simple average of year-by-year returns can differ, especially when returns are volatile.

What counts as a 'good' ROI?

It depends entirely on the asset type, risk level, and time period — there's no universal benchmark. Comparing CAGR against a relevant index or alternative investment over the same period is more meaningful than judging ROI in isolation.

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Finance

Investment ROI Calculator

Return on investment and annualized (CAGR) growth.

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About the Investment ROI Calculator

Measures how much an investment grew both in absolute terms (ROI) and as an annualized rate (CAGR), so you can compare investments held for different lengths of time on equal footing.

How to use it

Enter the Initial investment and Final value.
Enter the Holding period in years.
Read your net gain, ROI, and annualized CAGR in the result panel.

Formula

ROI = ((Final value − Initial investment) ÷ Initial investment) × 100
CAGR = ((Final value ÷ Initial investment)^(1/years) − 1) × 100

Standard return-on-investment and compound annual growth rate formulas, the common metrics used to measure and compare investment performance across different holding periods.

Worked example

A $10,000 investment that grows to $16,500 over 4 years has a 65% total ROI, but a CAGR of about 13.4% per year.

Recommendations

• Use CAGR, not raw ROI, when comparing investments held for different lengths of time.
• Factor in fees and taxes separately — this measures gross growth, not what you actually keep.
• A very high ROI over a very short period often carries more risk — weigh the return against the holding period.

Frequently asked questions

ROI is the total return over the whole holding period. CAGR spreads that same return evenly across each year, which is what lets you compare a 2-year investment fairly against a 10-year one.

Related tools

Compound Interest

Retirement Calculator

Simple Interest Calculator

Disclaimer

Illustrative estimate only, not financial or tax advice. Verify figures with a licensed adviser or your local tax authority.