How to calculate ROI
Return on investment (ROI) is your profit as a percentage of what you put in: ROI = (Final value − Amount invested) ÷ Amount invested × 100. Turn 10,000 into 15,000 and your ROI is 50%. It's the simplest way to compare how well different investments performed.
Why annualized return (CAGR) matters more
A 50% total return sounds great — but over what time? Earned in 1 year it's excellent; over 10 years it's modest. Annualized return (CAGR) smooths it into a per-year figure so you can compare fairly: CAGR = (Final ÷ Initial)^(1 ÷ years) − 1. As a benchmark, broad stock markets have historically averaged roughly 7–10% a year.
Total return to annualized return (CAGR)
The same total return means very different things over different periods. Find how much your money grew on the left and how long it took across the top to get the yearly rate.
| Total growth | 1 yr | 2 yrs | 3 yrs | 5 yrs | 10 yrs | 15 yrs | 20 yrs |
|---|---|---|---|---|---|---|---|
| 1.25× (+25%) | 25% | 11.8% | 7.7% | 4.6% | 2.3% | 1.5% | 1.1% |
| 1.5× (+50%) | 50% | 22.5% | 14.5% | 8.4% | 4.1% | 2.7% | 2% |
| 2× (+100%) | 100% | 41.4% | 26% | 14.9% | 7.2% | 4.7% | 3.5% |
| 3× (+200%) | 200% | 73.2% | 44.2% | 24.6% | 11.6% | 7.6% | 5.6% |
| 5× (+400%) | 400% | 123.6% | 71% | 38% | 17.5% | 11.3% | 8.4% |
| 10× (+900%) | 900% | 216.2% | 115.4% | 58.5% | 25.9% | 16.6% | 12.2% |
What ROI leaves out
- Fees and taxes — subtract them from your final value for a true picture.
- Inflation — a 6% return during 6% inflation is 0% in real buying power (see the inflation calculator).
- Risk — a high ROI on a risky bet isn't the same as a steady one.
What is the annual return if my money doubled in 10 years?
7.2% a year. Doubling in 5 years would be 14.9% a year — speed matters as much as size.
Is a 50% return good?
It depends entirely on the time it took. 50% in one year is exceptional; over 10 years it's only 4.1% a year — below the long-run average for broad stock markets.
Can ROI be negative?
Yes — if your investment is worth less than you paid, ROI is negative (a loss). Enter a smaller "returned" value to see it.
ROI vs CAGR — which should I use?
Use total ROI for a quick headline, and CAGR to compare investments held for different lengths of time. CAGR is the fairer number.
Should I include dividends or extra income?
Yes — add any income received to your "amount returned" so the ROI reflects your total gain.