ROI & CAGR calculator
Total return, annualized return and how long it takes to double.
Commissions, tax, maintenance
The steady rate that would produce the same result
At this annualised rate
| Year | Value at CAGR | Cumulative gain |
|---|---|---|
| 0 | $10,000.00 | $0.00 |
| 1 | $11,247.46 | $1,247.46 |
| 2 | $12,650.54 | $2,650.54 |
| 3 | $14,228.64 | $4,228.64 |
| 4 | $16,003.61 | $6,003.61 |
| 5 | $18,000.00 | $8,000.00 |
How it works
ROI is the total percentage gain. CAGR is the constant annual rate that would have produced that gain over the holding period — the number to use when comparing investments of different lengths.
ROI = (final − initial) / initial
CAGR = (final / initial)^(1/years) − 1 Why total return misleads
A 100% return is spectacular over three years and mediocre over twenty. ROI cannot tell them apart; CAGR can. Any comparison between two investments held for different periods needs the annualised figure.
CAGR is a smoothed fiction
It describes the straight line between the start and end points, not the path taken. Two investments with identical CAGR can differ enormously in volatility — one climbing steadily, the other halving before recovering. That difference matters a great deal if you might need to sell partway through.
Include the costs
Trading commissions, management fees, stamp duty and capital gains tax all come out of the return. A fund charging 1% a year gives up substantially more than 1% of the final balance, because the fee also forfeits everything that money would have compounded into.