ROI Calculator
Compare what you put in against what you got out, as a total return and as an annualised rate that makes different holding periods comparable.
How it works
Total ROI is the gain divided by what you originally put in. It answers how much you made, but says nothing about how long it took — and that omission makes it useless for comparison on its own.
The annualised rate fixes that. A 50% return over one year and a 50% return over five are wildly different investments; annualising converts both to a per-year figure so they can sit side by side.
Annualised return is compound, not an average. A 100% gain over five years is about 14.9% a year, not 20% — because each year's growth builds on the last, a smaller rate compounds to the same total.
The formula
ROI
ROI % = ((final − initial) ÷ initial) × 100
Annualised (CAGR)
CAGR % = ((final ÷ initial)^(1 ÷ years) − 1) × 100
Gain
gain = final value − initial investment
Worked examples
| Scenario | Working | Result |
|---|---|---|
| 10,000 becomes 15,000 | 5000 ÷ 10000 | 50% total return |
| That over 5 years | (1.5)^(1/5) − 1 | 8.45% a year |
| A 100% gain over 5 years | (2)^(1/5) − 1 | 14.87% a year, not 20% |
When you'd use it
- Comparing investments held for different lengths of time
- Reporting a return on a completed project
- Working out whether a gain kept pace with inflation
- Converting a total return into a yearly figure
Common questions
Why annualise a return?
Because time is half the story. Doubling your money in two years is excellent; doubling it in twenty is mediocre. Total ROI cannot tell them apart, and the annualised rate can.
Why isn't a 100% return over 5 years just 20% a year?
Because returns compound. Growing 14.87% a year for five years doubles the money — each year builds on a larger base, so a smaller rate reaches the same total. Dividing by the years overstates the annual rate.
Does this include fees, tax or additional contributions?
No. It compares one starting figure with one ending figure. If you added money along the way, ROI will overstate performance — use the investment calculator, which models contributions properly.