Investment Return Calculator
Calculate your investment return using three methods: simple ROI, CAGR (compound annual growth rate), or compound growth with a full year-by-year breakdown.
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Results
Year-by-Year Growth
| Year | Balance | Interest Earned | Total Growth |
|---|
Understanding Investment Return Metrics
Simple ROI (Return on Investment)
ROI measures the percentage gain or loss on an investment relative to the original cost:
ROI (%) = (Final Value − Initial Cost) / Initial Cost × 100
ROI is simple to calculate but doesn't account for time — a 50% gain over 1 year is very different from a 50% gain over 20 years. It's best for quick comparisons of the same investment across different scenarios.
CAGR (Compound Annual Growth Rate)
CAGR is the annualized rate of return needed to grow an investment from its initial to its final value over a given period, assuming compounding:
CAGR = (Final / Initial)^(1/years) − 1
CAGR is especially useful for comparing investments held over different time periods because it normalizes performance to a per-year rate. The S&P 500's long-run CAGR is approximately 10% before inflation and 7% after inflation.
Compound Growth
Compound growth shows how an initial investment grows over time when interest is continuously reinvested. The formula is:
A = P × (1 + r/n)^(n×t)
where P is principal, r is annual rate, n is compounds per year, and t is years. More frequent compounding produces marginally higher returns — daily compounding on a 5% rate yields 5.127% annually, versus 5% with annual compounding.
For more compounding scenarios — including with regular monthly contributions — see our Compound Interest Calculator. To track how your investments fit into your total financial picture, use the Net Worth Calculator.
Frequently Asked Questions
What's a good ROI for investments?
It depends entirely on the asset class and time horizon. Stocks have historically returned about 7–10% annually (CAGR). Real estate varies widely by market. Savings accounts currently offer 4–5% in high-yield accounts. "Good" ROI is always relative to the risk taken to achieve it — a 20% return means nothing if it required 10× the volatility of the market.
Can CAGR be negative?
Yes, if the final value is lower than the initial value (the investment lost money). A negative CAGR indicates the annualized rate of loss. For example, an investment that fell from $10,000 to $6,000 in 5 years has a CAGR of about −9.6% per year.
Does this calculator account for taxes or fees?
No. These calculations assume no taxes, fund management fees, or transaction costs. In practice, those reduce real-world returns meaningfully. For taxable accounts, adjust the final value by your expected capital gains tax. For funds, subtract the expense ratio from the expected annual return before entering it in the calculator.
What is the Rule of 72?
The Rule of 72 is a quick mental estimate: divide 72 by the annual return percentage to estimate how many years it takes to double your money. At 7% annually, it takes roughly 72/7 ≈ 10.3 years. At 10%, about 7.2 years. It's a useful sanity check on compound growth calculator results.
