Finance Tools/ROI Calculator
ROI Calculator
Calculate ROI and CAGR
Investment Information
Required for CAGR calculation
Result
Enter values
Frequently Asked Questions
ROI (Return on Investment) shows the total percentage gain or loss without considering time—a 50% return could be over 1 year or 10 years. CAGR (Compound Annual Growth Rate) normalizes returns to an annual basis, making it easier to compare investments of different durations. CAGR is more useful for long-term investment comparison.
A 'good' ROI depends on the investment type and risk level. Stock market investments historically return 7-10% annually. Real estate typically yields 8-12%. A good ROI beats the risk-free rate (Treasury bonds, ~4-5%) and compensates for the risk taken. Higher-risk investments should demand higher returns.
For multiple investments, calculate the weighted average ROI based on the amount invested in each. Alternatively, use the time-weighted return method which removes the impact of cash flows. For portfolios with regular contributions, consider using internal rate of return (IRR) for more accurate measurement.
Yes, for meaningful analysis. Nominal ROI doesn't account for purchasing power loss. Real ROI = ((1 + Nominal ROI) / (1 + Inflation Rate)) - 1. If your investment returns 8% but inflation is 3%, your real return is only about 4.85%. Always consider real returns for long-term planning.
Timing, risk, and liquidity matter greatly. A 100% ROI over 5 years (14.9% CAGR) is very different from 100% over 20 years (3.5% CAGR). Also consider: risk level (volatile vs. stable), liquidity (can you access the money?), fees and taxes, and opportunity cost of capital tied up.