ROI & CAGR Calculator

Most ROI calculators give you one number. That number is fine until you try to compare two investments held for different lengths of time — then it quietly misleads you, because a longer holding piles up a bigger ROI even at a slower pace. This calculator puts four views of the same result side by side — total ROI, ROI divided by years, the compound annualized ROI and CAGR — for up to three investments at once, and tells you in plain words why each pair differs.

The difference from a single-number calculator shows up straight away in the default example. An index fund that went from 10,000 to 18,000 in eight years has the biggest ROI, 80%. A stock that went from 5,000 to 6,500 in two years made only 30%. Per year, though, the stock grew almost twice as fast — 14.02% against 7.62%. Below that comparison sit two more tools that use the same idea: the CAGR you need to reach a target amount, checked against your own investments, and an APR ↔ APY converter, because APY is simply the CAGR of a savings account.

How to use the ROI & CAGR calculator

1. Describe each investment. Give it a name, the amount you put in, its final value (or sale price) and how long you held it in years and months. Add up to three.
2. Add income and costs if there were any. Income is cash you took out along the way — dividends, rent, interest you did not reinvest. Costs are extra money you paid in — fees, commissions, repairs. Leave both empty for a plain buy-and-hold.
3. Read the comparison. The banner says which investment won on total ROI and which won per year. The table lists all four measures, and “Why the numbers differ” explains them for the investment you pick.
4. Set a target in the second section: a starting amount, a goal and a number of years. You get the CAGR required and a check of whether each investment above would reach it.
5. Convert a rate in the last section, from APR to APY or back, at any compounding frequency.

How it works

Every figure comes from the same handful of inputs: the amount invested I, the final value V, income received D, extra costs C and the holding period n in years (months are divided by 12).

ROI              = (V + D − I − C) ÷ (I + C)
ROI ÷ years      = ROI ÷ n
Annualized ROI   = (1 + ROI)^(1/n) − 1
CAGR             = (V ÷ I)^(1/n) − 1
CAGR needed      = (target ÷ start)^(1/n) − 1
APY              = (1 + APR ÷ k)^k − 1      (k compounding periods a year)
APR              = k × ((1 + APY)^(1/k) − 1)
Continuous       APY = e^APR − 1

Each measure answers a different question, which is why they rarely agree:

The gap between ROI ÷ years and annualized ROI is the effect of compounding. Gains earned early go on to earn gains of their own, so a smaller steady rate is enough to reach the same total. The longer the holding and the bigger the return, the wider that gap. Under one year it flips: a short gain annualized with compounding comes out higher than the simple figure, and the calculator warns you that this is a projection rather than a result.

The gap between annualized ROI and CAGR is cash flow. If an apartment barely rose in value but paid good rent, its CAGR looks poor while your annualized ROI looks healthy. If a fund grew nicely but charged heavy fees, the opposite happens. CAGR judges the asset; annualized ROI judges your money.

The CAGR formula is the standard compound-growth formula found in finance textbooks and in the CFA Institute’s curriculum on return measurement. The APY formula is the one US banks use under the Truth in Savings Act (Regulation DD, 12 CFR part 1030), and the continuous case is its limit as compounding becomes infinitely frequent.

Worked examples

Example 1: a long winner and a short winner

Checking the fund: 18,000 ÷ 10,000 = 1.8, and 1.8 to the power of 1/8 is 1.0762, so 7.62% a year. Neither had income or costs, so CAGR equals annualized ROI for both. The fund made more money in total because it was held four times as long; the stock grew faster for every year the money was committed.

Example 2: a rental where cash flow matters

A flat bought for 200,000 and sold five years later for 260,000. Along the way it earned 40,000 of net rent and needed 15,000 of repairs and fees. Money in is 215,000; money out is 300,000.

• ROI = 85,000 ÷ 215,000 = 39.53%
• ROI ÷ years = 7.91%
• Annualized ROI = (300,000 ÷ 215,000)^(1/5) − 1 = 6.89%
• CAGR = (260,000 ÷ 200,000)^(1/5) − 1 = 5.39%

The property’s value grew 5.39% a year, but the rent lifts the return on the owner’s money by 1.50 points to 6.89% — even after the costs.

Example 3: what does a target require?

Turning 25,000 into 100,000 in 15 years is a 4× multiple. The CAGR needed is 4 to the power of 1/15, minus 1: 9.68% a year. The simple average would say 20% a year (300% ÷ 15), which shows how badly ROI ÷ years misleads over long periods. At the index fund’s 7.62% the 25,000 would grow to about 75,262 — short of the goal, needing about 18.9 years. At the stock’s 14.02% it would reach about 178,861.

Example 4: APR and APY

A savings account paying a 5% APR compounded monthly earns (1 + 0.05 ÷ 12)^12 − 1 = 5.12% APY. Compounded daily it is 5.13%. Going the other way, an account advertised at 4.5% APY with monthly compounding has an APR of 4.41%.

Common mistakes

• Ranking by total ROI across different lengths. A ten-year holding will usually beat a two-year one on ROI. Compare annualized figures instead.
• Dividing ROI by years. It overstates every multi-year gain. Use it only as a rough sense check.
• Forgetting income and costs. Dividends you spent, rent you collected, fees you paid and repair bills all change the return on your money. Leaving them out makes the result look like CAGR, not ROI.
• Annualizing a few weeks. A 4% gain in one month is not a 60% yearly return. The calculator flags any holding shorter than a year.
• Comparing an APR with an APY. Convert one to the other first, at the same compounding frequency.
• Ignoring inflation. A 6% CAGR in a year with 4% inflation is about 2% in real terms. The inflation calculator shows what past amounts are worth today.

Glossary

• ROI — return on investment: net gain divided by the money put in.
• CAGR — compound annual growth rate: the steady yearly rate linking a start value and an end value.
• Annualized ROI — total ROI converted to a compound yearly rate, including income and costs.
• APR — annual percentage rate: the stated yearly rate before compounding.
• APY — annual percentage yield: the effective yearly rate after compounding.
• Compounding — earning returns on earlier returns, not just on the original amount.

To project a balance forward with regular deposits rather than measure a past result, use the compound interest calculator. Every figure on this page is an estimate for comparing results on equal terms, not investment advice — past returns do not promise future ones, and taxes and risk are not included.

Last reviewed: October 11, 2026