ROI Calculator
Calculate Return on Investment and Annualized Return (CAGR).
Required for Annualized Return
Understanding ROI
Return on Investment (ROI) is the most popular metric for evaluating profitability. However, it has a major flaw: it doesn't account for time. A 50% ROI over 1 year is great; a 50% ROI over 10 years is poor.
The Solution: Annualized ROI (CAGR)
To compare investments held for different periods, use the CAGR (Compound Annual Growth Rate). This reduces the total return down to a standardized "per year" number.
Formulas
ROI = ((Final - Initial) / Initial) × 100
CAGR = ((Final / Initial) ^ (1/Years)) - 1