What's the difference between ROI and annualized return?

ROI is the total percentage gain or loss over the holding period. Annualized return (CAGR) converts that to an equivalent yearly rate, making it easier to compare investments held for different durations.

How is CAGR calculated?

CAGR = (Final / Initial)^(1 / years) - 1. It represents the constant annual growth rate that would produce the same final value from the initial investment.

Does this account for fees or dividends?

No. If you reinvested dividends, include them in the final value. Subtract fees from the final value to see net return.

ROI Calculator

Finance· 37 tools

Free online ROI calculator. Enter your initial investment, final value, and holding period to see total return, profit or loss, and annualized return (CAGR). Useful for comparing investment performance across different time frames.

Initial Investment ($)

Final Value ($)

Holding Period (years)

$5,000.00

Profit / Loss

50.00%

Total ROI

8.45%

Annualized (CAGR)

Disclaimer: For informational purposes only. This is not financial, tax, or legal advice — consult a licensed professional before making decisions.

Frequently Asked Questions

References

Evaluating investment performance — U.S. Securities and Exchange Commission

Related Tools

Compound Interest Calculator
Project investment growth with initial deposit, monthly contributions, and annual interest.
Savings Goal Calculator
Find out how long it takes to reach a savings goal with regular monthly contributions.
Loan Calculator
Calculate monthly payment, total interest, and total cost of any fixed-rate loan — personal, auto, or mortgage — using standard amortization.

Frequently Asked Questions

References and sources

Related Tools