# ROI Calculator — Return on Investment and CAGR > Calculate return on investment (ROI) and compound annual growth rate (CAGR) from a starting value, ending value, and holding period. Free, multi-currency. - **Category:** Finance & Money - **Interactive calculator:** https://youcalc.com/en/finance-money/roi/ - **Price:** Free, no sign-up required ## Overview This calculator measures how much an investment has grown relative to its starting cost. Enter the amount you paid, the amount you received or the current value, and how many years you held it — the calculator returns both the total return and the annualised rate of growth. ## How to read your result The headline ROI is the total percentage gain over the full holding period: a 50% ROI means the investment grew to one-and-a-half times what you paid, regardless of how long that took. Because ROI ignores time, compare investments of different durations using the CAGR (compound annual growth rate) instead — it converts the total return into the equivalent steady yearly rate. A higher CAGR is the fairer benchmark when the holding periods differ. ## Method ROI is calculated as (final value minus initial value) divided by initial value, then multiplied by 100 to express it as a percentage. CAGR is derived from the same two values and the holding period: raise the ratio of final to initial value to the power of one divided by the number of years, then subtract one and multiply by 100. The gain shown is simply final value minus initial value. All rounding is to two decimal places. ## Example - **Setup:** You invest 5,000 and sell three years later for 7,500. - **Result:** The gain is 2,500. ROI = 50% (total return). CAGR = 14.47% per year — that is the fixed annual rate that would compound 5,000 into 7,500 in exactly three years. ## Frequently asked questions ### What is the difference between ROI and CAGR? ROI is the simple total percentage gain over the whole holding period, regardless of duration. CAGR converts that gain into the equivalent steady annual rate, so you can compare investments held for different lengths of time on equal footing. ### Does this account for dividends, deposits, or withdrawals? No. The calculation uses only two data points — the starting value and the ending value — so intermediate cash flows such as dividends, top-ups, or partial withdrawals are not captured. For those situations, the money-weighted return (IRR) is the more appropriate metric. ### Can I enter a holding period shorter than one year? Yes. Enter a decimal such as 0.5 for six months or 0.25 for one quarter. The CAGR formula handles fractional years directly, annualising the return as though it were compounded continuously at that rate. ### What does a negative ROI mean? A negative ROI means the final value is less than what you originally paid — the investment lost money. A final value of zero produces an ROI of exactly −100%, representing a total loss. ### Does this account for taxes or inflation? No. Both figures are nominal, pre-tax returns. Inflation erodes real purchasing power, and capital-gains tax reduces the amount you actually keep. Treat the results as a gross performance measure, not a net-of-costs figure. ## Related calculators - [Compound Interest Calculator](https://youcalc.com/en/finance-money/compound-interest/) - [Loan Calculator](https://youcalc.com/en/finance-money/loan/) - [Retirement Savings Calculator](https://youcalc.com/en/finance-money/retirement-savings/) - [Email Marketing ROI Calculator](https://youcalc.com/en/social-media-seo/email-marketing-roi/) - [ROAS Calculator](https://youcalc.com/en/social-media-seo/roas-break-even/) ## Sources - https://www.investopedia.com/terms/r/returnoninvestment.asp - https://www.investopedia.com/terms/c/cagr.asp --- Interactive version: https://youcalc.com/en/finance-money/roi/ · From YouCalc — https://youcalc.com