Investment Return (ROI) Calculator

What this calculator does

Given a starting value, ending value, and holding period, this calculator computes total return, compound annual growth rate (CAGR), and the absolute dollar gain or loss.

How CAGR works

CAGR = (Ending / Starting) ^ (1 / years) − 1

It's the constant annual rate that, applied each year for the holding period, takes you from the starting value to the ending value. Real-world returns are usually lumpy — CAGR smooths over the ups and downs.

What CAGR can't tell you

CAGR ignores volatility. Two investments with the same CAGR can feel very different to hold — one might have sleepy 5–10% years, the other might have +40%/−20% swings. For risk-adjusted comparison, you need additional measures like the Sharpe ratio and max drawdown.

Tips and common mistakes

• Don't confuse total and annualized. A 100% total return over 30 years is a 2.34% CAGR — barely beating cash.
• Adjust for inflation when relevant. A 7% nominal return when inflation was 4% is only about 2.9% real.
• Account for fees and taxes. A 7% gross return is often 5–6% after expense ratios, fund turnover, and capital gains.
• Don't cherry-pick start and end dates. Picking 2009 (post-crash low) makes any stock investment look incredible. Use long, representative periods.

Frequently asked questions

What is CAGR?

CAGR (compound annual growth rate) is the smooth annual rate that gets you from a starting value to an ending value over a given period. It represents what your return would have been if growth had been steady. CAGR is a better single-number measure of an investment than 'total return' because it accounts for the time horizon.

Why is CAGR a better measure than total return?

A 50% total return sounds great — until you find out it took 30 years (about 1.4% CAGR, worse than inflation). CAGR normalizes returns to an annual rate so you can compare investments fairly across different time horizons.

What's a good annual return?

Long-run U.S. stock-market returns have averaged roughly 10% nominal (about 7% real, after inflation). Bonds have averaged 4–6%. Cash and savings accounts barely beat inflation. Your portfolio's CAGR depends on your asset mix.

How do fees affect my returns?

Fees compound against you. A 1% annual fee on a portfolio averaging 7% returns leaves you with effectively 6%. Over 30 years, that's a roughly 25% smaller ending balance. Always look at expense ratios when choosing funds.

What's the difference between real and nominal return?

Nominal return is the raw dollar return. Real return subtracts inflation. If your investment returned 10% nominally and inflation was 3%, your real return was about 7% — which is what your purchasing power actually grew by.