ROI Calculator

ROI = (final value - costs - amount invested) / amount invested x 100. Annualized return, also called CAGR, is (final / initial)^(1 / years) - 1. It answers what steady yearly rate would have produced the same result, which total return cannot tell you.

What is the difference between ROI and annualized return?

ROI is the total gain over the whole period, however long that was. Annualized return converts it to a per-year rate. A 65 percent ROI is excellent over two years and poor over twenty, and only the annualized figure shows which you have.

What is a good annual return?

The S&P 500 has averaged roughly 10 percent a year before inflation over the long run, or about 7 after. Beating that consistently is difficult, and most investors who try end up below it once fees are counted.

What is the rule of 72?

Divide 72 by the annual percentage return to get roughly how many years money takes to double. At 8 percent that is 9 years. It is an approximation, but it stays within a few percent for any normal rate.