ROI Calculator

Measuring what you earned

ROI ("return on investment") is the universal language for "did this make money, and how much?" — but the raw number is easy to misread. A 50% return over 10 years is far worse than a 50% return over 6 months. This tool reports both: the total ROI (the headline percent) and the annualised CAGR (what it works out to per year), so you can compare investments held for different lengths of time on equal footing. Use it for a quick gut-check before claiming "I beat the market" or before swapping out one position for another.

The math

Total ROI = (final − initial − fees + dividends) ÷ initial × 100.
CAGR (Compound Annual Growth Rate) = (final ÷ initial)^(1/years) − 1, expressed as %.
"CAGR incl. divs" treats dividends as reinvested at the end and reports the annualised total return; it's the number to compare across funds with different dividend policies.

Where the percentage misleads

• Short holding periods inflate annualised numbers. A 10% gain in 3 months annualises to ~46%/year — but you don't have a year of data to support that. The "under 1 year" badge flags this.
• Fees compound silently. A 1% annual fee feels small, but over 30 years it erodes roughly 20% of your final balance. Include all fees: commissions, fund TER, advisor fees, withdrawal penalties.
• Tax isn't subtracted. Most jurisdictions tax capital gains and/or dividends. After-tax ROI is what actually lands in your account — subtract the rate appropriate for your tax bracket and account type (ISA, Roth, taxable, etc).
• Inflation isn't subtracted. A 6% nominal return at 3% inflation is only a 3% real return. For long-horizon comparisons, use the inflation-calculator on top.
• Don't compare absolute profit across positions of different sizes. $1000 → $2000 doubles your money; $100k → $110k earns much more in dollars but only 10%. ROI normalises the comparison.
• One winner per period is not a strategy. Picking last decade's best performer for next decade has a very poor empirical record. Use this tool for ex-post review, not forecasting.
• Property ROI is messy. Most "real estate beat stocks" claims ignore property taxes, maintenance, insurance, vacancy, transaction costs, and unpaid time as landlord. Add those into the fees field for a fair comparison.

Pairs with

• compound-interest-calculator — project ROI forward into the future.
• inflation-calculator — convert nominal ROI to real (purchasing-power) ROI.
• retirement-projection — apply an assumed CAGR to a long-horizon plan.

$10,000 into a fund for 3 years

You invest $10,000 in a fund and hold it for 3 years. You sell for $13,000, paid $150 in fees along the way, and collected $400 in dividends. Total ROI = (13,000 − 10,000 − 150 + 400) ÷ 10,000 × 100 = 32.5%. That headline looks great until you annualise it: CAGR = (13,000 ÷ 10,000)^1/3 − 1 = 9.1%/year. Both numbers describe the same investment — but the 9.1%/year is the one to line up against an index fund that returned, say, 8%/year over the same window.

Quick answers

ROI or CAGR — which should I quote? Quote CAGR whenever you're comparing investments held for different lengths of time; it puts everything on a per-year footing. Quote total ROI only when the holding periods are identical, or when you specifically mean cumulative profit rather than a rate.

Is a higher ROI always better? No. A higher return earned over a much longer period, or at much higher risk, can be the worse deal. Always read the return next to its time horizon (that's what CAGR encodes) and a sense of the volatility you accepted to get it.

Does this handle money added over time? No — it assumes a single lump sum in and a single value out. If you contributed on a schedule (dollar-cost averaging), the honest measure is IRR (internal rate of return), which this simple calculator doesn't compute. Treat the CAGR here as valid for lump-sum holdings only.

Three metrics, three questions

Three return metrics answer three different questions, and mixing them up is where most "I beat the market" claims fall apart. Total ROI tells you how much you made in aggregate but ignores time. CAGR puts returns of different lengths on equal footing by annualising them, so a 50% gain over six months and one over ten years no longer look alike. IRR goes further and handles multiple cash flows arriving at different times. This tool reports total ROI and CAGR side by side precisely so a long, slow win is never mistaken for a fast one — the annualised number is the honest basis for comparing any two investments held for different periods.

Nominal vs real — the silent overcount

Comparing a nominal return against nothing. A 7% CAGR in a 5% inflation stretch is a real return of under 2% — measure gains against inflation, not against zero, or you will overstate how much you actually grew. The related trap is comparing a dividend-reinvested CAGR from one fund with a price-only figure from another: match the definitions (both real or both nominal, both total-return or both price) before you declare a winner.

Related

For a pure savings projection use the compound interest calculator; for a property deal with yearly cash flows step up to the property IRR calculator; and pressure-test a long horizon with the retirement projection. Strip inflation out first with the inflation calculator. Background: ROI vs CAGR — comparing returns honestly.