💹 Return on Investment (ROI) Calculator
Return on investment (ROI) tells you how much your investment has yielded relative to what you put in. A 50% return in 1 year is very different from 50% over 10 years — that's why we also show the annualised return (CAGR) so you can fairly compare investments of different lengths.
Formula
ROI = (Final value − Initial) ÷ Initial × 100%. CAGR = (Final ÷ Initial)^(1 ÷ Years) − 1
Total return gives you a snapshot: your starting balance and ending balance. But it says nothing about how long it took. CAGR (Compound Annual Growth Rate) folds all years into one number — how fast your money grew per year on average. The formula: your ending balance to the power of (1 ÷ number of years), minus 1.
Steps
- 1Enter your initial investment (the amount you put in).
- 2Enter the current or final value of your investment.
- 3Enter the number of years (or fraction) since you made the investment.
- 4The calculator shows the total return and annual return (CAGR).
ROI vs CAGR comparison
| Scenario | Initial | Final | Years | ROI % | CAGR % |
|---|---|---|---|---|---|
| Stock 1 | € 1,000 | € 1,500 | 1 | +50% | +50% |
| Stock 2 | € 1,000 | € 1,500 | 5 | +50% | ≈8.4% |
Same total return (50%) but very different annual return (CAGR) because stock 2 took much longer.
commonMistakes
- Comparing two investments based only on total return without accounting for how long they took.
- Ignoring costs and taxes — these significantly reduce the actual return.
- Not distinguishing between different investment types with different risk levels.
useCases
- Evaluating the return on a stock portfolio or property investment over multiple years.
- Fairly comparing different investments with unequal time periods (e.g. 2-year bond vs 10-year stocks).
- Determining whether an investment has performed well or poorly and whether it beat or fell short of expectations.