A three-year holding
- Input
- £10,000 → £15,000 over 3 years
- Output
- ROI 50% · CAGR 14.47%
The headline 50% sounds better than it is. The annualised 14.47% is the number that compares against a savings rate or an index.
ROI Calculator
An ROI calculator expresses a gain as a percentage of what was invested. Its weakness is that it ignores time entirely — a 50% return looks identical whether it took one year or ten. The annualised figure, CAGR, is what makes two investments comparable, so both are shown together here rather than leaving the more useful one out.
Runs entirely in your browser — your figures are never uploaded.
How do you calculate return on investment?
ROI = (gain ÷ cost) × 100. An investment of £10,000 returning £15,000 gives a 50% ROI. Over three years that is a 14.47% compound annual growth rate — the figure to use when comparing investments held for different periods.
This calculator performs arithmetic and is not investment advice. Past returns do not indicate future performance.
£
£
years
Unlocks the annualised figure
Return on investment
+50.00%
Gain of £5,000
- Annualised (CAGR)
- 14.47%
- Absolute gain
- £5,000
The comparable figure
A 50.0% total return over 3 years is 14.47% a year. Always compare investments on the annualised figure — simple ROI hides how long the money was tied up.
The maths
ROI Calculator formula
Formula
ROI = ((Final − Initial) / Initial) × 100 · CAGR = ((Final/Initial)^(1/years) − 1) × 100
- Initial
- Amount invested
- Final
- Value returned
- years
- Holding period, for the annualised figure
Worked example
£10,000 invested, worth £15,000 after 3 years
Inputs
- Initial
- £10,000
- Final
- £15,000
- Period
- 3 years
Working
- Gain = 15,000 − 10,000 = £5,000
- ROI = (5,000 ÷ 10,000) × 100 = 50%
- CAGR = ((15,000 ÷ 10,000)^(1/3) − 1) × 100
- = (1.5^0.3333 − 1) × 100 = (1.14471 − 1) × 100
ROI 50%, CAGR 14.47% a year.
How to
How to use the ROI Calculator
- 1
Enter what you invested
Put in the total cost, including fees and commissions where they apply — leaving them out overstates the return.
- 2
Enter what it returned
Put in the final value or sale proceeds, after selling costs. For an ongoing investment, use the current value.
- 3
Add the holding period
Enter how long you held it. This unlocks the annualised figure, which is the only fair basis for comparing investments of different lengths.
- 4
Compare the two numbers
Use ROI to describe the total outcome and CAGR to compare against other opportunities or a benchmark rate.
Examples
ROI Calculator examples
Same ROI, different period
- Input
- £10,000 → £15,000 over 10 years
- Output
- ROI 50% · CAGR 4.14%
Identical ROI, very different investment. Over ten years, 4.14% a year barely beats inflation — which simple ROI completely hides.
A loss
- Input
- £10,000 → £7,500 over 2 years
- Output
- ROI −25% · CAGR −13.40%
Losses annualise too. A 25% fall over two years is a 13.4% annual decline, not 12.5%, because the losses compound.
Why use it
What the ROI Calculator gives you
Time-adjusted comparison
CAGR sits alongside ROI, so a return spread over ten years is never mistaken for the same return earned in one.
Honest about losses
Negative returns are annualised correctly rather than divided evenly, which understates the rate of decline.
Simple inputs
Three numbers give both figures. No account, no sign-up and no assumptions hidden behind the result.
Nothing transmitted
Portfolio figures stay in your browser.
Good to know
ROI Calculator limitations
- Ignores cash flows during the holding period. If you added or withdrew money, use an internal rate of return instead.
- Does not adjust for risk. A 15% return from a volatile asset is not equivalent to 15% from a stable one.
- Excludes tax, which can materially reduce the realised return depending on the asset and jurisdiction.
- CAGR describes a smooth average path that no real investment follows; it says nothing about volatility along the way.
Summary
ROI Calculator in short
- ROI = ((Final − Initial) / Initial) × 100.
- CAGR = ((Final/Initial)^(1/years) − 1) × 100.
- A 50% ROI is 14.47% a year over three years but only 4.14% over ten.
- Always compare investments using the annualised figure.
- Neither figure adjusts for risk or interim cash flows.
FAQ
ROI Calculator questions
What is the ROI formula?
ROI = ((Final value − Initial cost) / Initial cost) × 100. An investment of £10,000 returning £15,000 gives ((15,000 − 10,000) / 10,000) × 100, which is 50%.
What is the difference between ROI and CAGR?
ROI is the total return regardless of time; CAGR converts it to a yearly rate. A 50% ROI is 14.47% a year over three years and 4.14% over ten — the same ROI describing two very different investments.
What counts as a good ROI?
Only in comparison. Judge it against a risk-free rate, inflation and a relevant index over the same period. A 6% annual return is strong when inflation is 2% and weak when it is 8%.
Should I include fees?
Yes, on both sides. Add purchase costs to the initial amount and subtract selling costs from the final value. Excluding them can overstate returns by several percentage points on smaller investments.
How is a negative return annualised?
By the same compounding formula. A fall from £10,000 to £7,500 over two years is −13.40% a year, not −12.5%, because each year's decline applies to the reduced balance.
What if I invested more money along the way?
ROI and CAGR both assume a single investment and a single exit. With deposits or withdrawals in between you need money-weighted return — the internal rate of return — which accounts for the timing of each flow.
Can I annualise a return from a few months?
Arithmetically yes, but it is usually misleading. Projecting a strong three-month result to a yearly figure assumes the conditions persist, which is rarely a safe assumption.
Does this work for property or business returns?
The formula applies to any investment. For property, include stamp duty, legal fees and maintenance in the cost, and rental income in the return, or the figure will flatter substantially.
Are my investment figures uploaded?
No. Both calculations are arithmetic performed in the page. Nothing about what you invested or what it returned is sent to a server or retained.
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