ROI & CAGR Calculator
Measure total net profit, simple percentage return (ROI), and annual compound growth rate (CAGR) for any investment.
ROI vs. CAGR: What's the Difference?
When evaluating investment performance, both ROI and CAGR provide valuable insight:
- Return on Investment (ROI): Measures total percentage gain or loss relative to the initial cost. Formula:
ROI = [(Final Value + Income - Initial Cost) / Initial Cost] × 100. - Compound Annual Growth Rate (CAGR): Measures the geometric annual rate of growth over a multi-year investment horizon. Formula:
CAGR = [(Final Value / Initial Cost) ^ (1 / Years)] - 1.
Frequently Asked Questions
Why is CAGR better for multi-year investments?
Simple ROI ignores time. A 50% ROI over 1 year is exceptional, whereas a 50% ROI over 20 years is relatively low. CAGR normalizes growth per year so you can compare assets fairly.
Can ROI be negative?
Yes. If the final value plus dividends is less than your initial investment, your ROI and net profit will be negative, indicating a net loss.
⚠️ Financial Disclaimer & Last Updated (2026)
This calculator is provided for estimation and educational purposes only and does not constitute formal financial, investment, tax, or legal advice. Interest rates, tax bracket thresholds, and market returns fluctuate over time. Historical benchmarks (such as the S&P 500 long-term historical average of ~10% nominal / ~7% real return after inflation, source: S&P Dow Jones Indices / Investopedia) are for illustrative comparisons only. Always consult a licensed Certified Financial Planner (CFP) or CPA for personal financial decisions.