ROI Calculator

How to use this calculator

1. Enter the amount invested at the start.
2. Enter the value now, including any dividends or income received.
3. Enter how long you held it.

The headline figure is the total return. The annualised figure underneath is the one to use when comparing against anything else.

How the calculation works

Total return is simple arithmetic:

ROI = (final − initial) / initial × 100

Annualised return, or CAGR, is the constant yearly rate that would produce the same result:

CAGR = ((final / initial)^(1/years) − 1) × 100

The second formula is the important one, and the reason is that the first has no concept of time. A 60 percent return is superb over two years and poor over twenty, and total ROI reports both identically.

A worked example

$15,000 invested, now worth $24,000, held for 6 years.

ROI = (24000 − 15000) / 15000 × 100
ROI = 9000 / 15000 × 100
ROI = 60%

The annualised rate:

CAGR = ((24000 / 15000)^(1/6) − 1) × 100
CAGR = (1.6^0.16667 − 1) × 100
CAGR = (1.081484 − 1) × 100
CAGR = 8.15%

Total return	60.00%
Annualised (CAGR)	8.15%
Net profit	$9,000.00
Multiple of your money	1.60×
Doubles every	8.9 years

A 60 percent headline becomes a rather more ordinary 8.15 percent a year — respectable, roughly in line with long-run stock market averages, and nothing like as impressive as the big number suggests.

Why annualising changes the picture

Consider two investments that both doubled your money:

	Held	Total ROI	Annualised
Investment A	3 years	100%	25.99%
Investment B	15 years	100%	4.73%

Identical total returns. One is exceptional, the other barely beats a savings account. Any comparison based on the total figure alone is meaningless unless the holding periods match.

Common mistakes to avoid

Comparing total returns across different holding periods. This is the mistake the annualised figure exists to prevent, and it is everywhere — in fund marketing, property anecdotes and crypto screenshots alike. Always ask “over how long”.

Ignoring fees, tax and dividends. ROI should capture everything. Add income received to the final value and subtract every fee, commission and tax paid. An ROI counting price appreciation while ignoring a 1 percent annual fee flatters the investment and will not match your account.

Using ROI when you contributed along the way. This calculator assumes one amount invested at the start and left alone. If you added money regularly, ROI is the wrong tool — money added in the final year had one year to grow, not six. You want a money-weighted return such as IRR.

Forgetting inflation. An 8.15 percent nominal return during a period of 3 percent inflation is about 5 percent in real terms. Over long periods this is the difference between a portfolio that grows your purchasing power and one that merely keeps pace.

Treating high returns as skill rather than risk. A high return usually means high risk was taken, whether or not it was visible at the time. The returns you see are the ones that worked out; the comparable bets that did not are rarely mentioned.

A useful shortcut

The rule of 72 approximates doubling time: divide 72 by the annual percentage rate. At 8 percent, 72 ÷ 8 = 9 years, and the exact answer is 9.01. It stays accurate for rates roughly between 4 and 15 percent, and it is quick enough to do while someone is still talking.

When this calculator is not the right tool

For projecting forward rather than measuring backward, use the compound interest calculator. For working out what to save monthly toward a target, use the savings goal calculator. And for investments with irregular contributions and withdrawals, you need IRR, which no simple calculator can do properly — a spreadsheet’s XIRR function is the right tool there.