Return on Investment (ROI) calculator to evaluate investment gains. Supports simple ROI through multi-investment comparison.
Four tabs: simple ROI, ROI with a holding period (CAGR), 2-3 project side-by-side comparison, and target ROI (back-solve the final value you need).
Disclaimer: Results are estimates. Past performance does not guarantee future results.
Calculator information
📋 How to use this calculator
- Pick the ROI calculation type: simple (no period), with a time period (CAGR), multi-investment comparison, or target ROI.
- For simple ROI, enter the initial capital (investment) in dollars and the ending value or net gain.
- For ROI with a period, add the investment duration in years so the calculator can compute CAGR (Compound Annual Growth Rate).
- For comparison, enter data for 2-3 different investments (capital, result, period) to see which is most profitable.
- Click Calculate to see the ROI percentage, net profit, and investment viability analysis.
- Tip: Compare ROI with benchmarks such as inflation (2-3%/year), high-yield savings (4-5%), or the S&P 500 long-term average (~10%) for context.
🧮 ROI and CAGR Formulas
ROI = ((Ending_Value - Capital) / Capital) x 100% | Profit = Ending_Value - Capital | CAGR = ((Ending_Value / Capital)^(1/n) - 1) x 100% | Annualized_ROI = ((1 + ROI)^(1/n) - 1) x 100%
- Capital = initial investment ($)
- Ending_Value = total current value or sale proceeds ($)
- Profit = net gain ($)
- n = investment duration (years)
- ROI = Return on Investment (total percent)
- CAGR = equivalent annual compounded growth
Simple ROI does not account for time, while CAGR is more accurate when comparing investments with different holding periods. ROI does not yet account for inflation, taxes, or transaction costs.
💡 Worked example: $50,000 mutual fund investment grows to $72,000 over 3 years
Given:- Initial capital: $50,000
- Ending value: $72,000
- Period: 3 years
Steps:- Compute profit: $72,000 - $50,000 = $22,000
- Total ROI: (22,000 / 50,000) x 100% = 44%
- CAGR: ((72/50)^(1/3) - 1) x 100% = (1.44^0.333 - 1) x 100%
- 1.44^0.333 = 1.1292, so CAGR = (1.1292 - 1) x 100% = 12.92%
- Compare with the S&P 500 (~10%/year long-term): this investment outperformed the broad US equity market
Result: Total ROI 44%, CAGR 12.92%/year, profit $22,000. The investment is very strong (above the long-term equity market average).
❓ Frequently asked questions
What is the difference between ROI and CAGR?
ROI (Return on Investment) measures the total gain on an investment as a percentage without accounting for time, while CAGR (Compound Annual Growth Rate) measures the equivalent annual growth assuming compounding. Example: an investment that doubles in 2 years has an ROI of 100% but a CAGR of only 41.42%/year. CAGR is more appropriate for comparing investments with different holding periods or judging consistent performance.
What ROI is considered good?
A 'good' ROI depends on asset class and risk profile. Common US benchmarks: HYSA / CDs 4-5%/year (low risk), US Treasury bonds 4-5%, investment-grade corporate bonds 5-6%, S&P 500 10-year average ~10-12%, real estate 8-12%/year, small-cap equities 11-13% (higher volatility). A consistent ROI above 15%/year is excellent. Always compare with inflation (2-3%) to gauge the real return.
Does ROI already include costs and taxes?
Simple ROI does not yet include transaction costs (broker commissions, expense ratios of 0.03-1%), taxes (15-20% federal long-term capital gains, up to 37% short-term as ordinary income, plus state taxes), or inflation. For a more accurate view, calculate Net ROI = ((Ending_Value - Capital - Costs - Taxes) / Capital) x 100%. Real ROI adjusts the nominal ROI for inflation: Real_ROI = ((1+ROI)/(1+inflation) - 1) x 100%.
How do I calculate ROI with periodic contributions?
For investments with periodic contributions (DCA - Dollar Cost Averaging), use the IRR (Internal Rate of Return) method which accounts for the timing of each cash flow. The simple formula ROI = ((Ending_Value - Total_Contributions) / Total_Contributions) x 100% gives a rough picture but is not precise because earlier contributions have longer to compound. Use Excel's XIRR function or an IRR calculator for precision.
What are the weaknesses of ROI as an investment metric?
ROI has several weaknesses: it does not account for time (50% in 1 year vs 5 years looks the same), it ignores risk (volatility and probability of loss), it does not consider opportunity cost, it can be manipulated by cherry-picking favorable periods, and it omits inflation and taxes. Complementary metrics such as Sharpe Ratio, Maximum Drawdown, and Risk-Adjusted Return provide a fuller picture.
📚 Sources & references
Last updated: May 11, 2026