Investment Return Calculator
Calculate your investment return (ROI), total profit or loss, and annualized return rate (CAGR). Perfect for evaluating stock, mutual fund, and real estate investments.
Investment Return Calculator
Calculate your investment return (ROI), total gain/loss, and annualized return rate.
ROI (Return on Investment) measures the gain or loss on an investment relative to the amount invested. It's expressed as a percentage.
CAGR (Compound Annual Growth Rate) represents the rate at which an investment would have grown if it grew at a steady rate annually. It smooths out volatility.
Note: This calculator assumes no additional investments or withdrawals during the holding period. For more complex scenarios, consider using a compound interest calculator.
Understanding Investment Returns
Investment return measures the profit or loss made on an investment relative to the amount invested. Understanding different types of returns helps you evaluate and compare investment performance effectively.
ROI (Return on Investment)
ROI = ((Final - Initial) / Initial) × 100
ROI measures the total return as a percentage of the original investment. It's simple but doesn't account for the time period of the investment.
CAGR (Compound Annual Growth Rate)
CAGR = ((FV/PV)^(1/n) - 1) × 100
CAGR shows the smoothed annual rate of return, accounting for compounding. It's ideal for comparing investments over different time periods.
Example Calculation
Scenario: You invested $10,000 in a stock 3 years ago, and it's now worth $15,000.
Total Return (ROI)
= ((15,000 - 10,000) / 10,000) × 100
= (5,000 / 10,000) × 100
= +50%
Annualized Return (CAGR)
= ((15,000/10,000)^(1/3) - 1) × 100
= (1.5^0.333 - 1) × 100
= +14.47%
While the total return is 50%, the annual rate of growth was approximately 14.47% per year.
Comparing Investment Metrics
| Metric | Best For | Limitation |
|---|---|---|
| Total Return (ROI) | Quick overview of profit/loss | Doesn't account for time |
| CAGR | Comparing investments of different durations | Assumes steady growth, ignores volatility |
| Annualized Return | Standardizing returns to yearly rate | May overstate short-term performance |
| Monthly Avg Return | Understanding monthly growth rate | Oversimplifies month-to-month variation |
Investment Return Benchmarks
S&P 500 Average
~10%
Historical annual return
Bond Market Average
~5-6%
Long-term average
Real Estate
~8-12%
Including appreciation + rent
Savings Account
~0.5-5%
Varies by market conditions
Inflation Rate
~2-3%
Historical average
Risk-Free Rate
~4-5%
Treasury bonds (current)
Tips for Better Returns
- 1.Diversify: Spread investments across different asset classes to reduce risk.
- 2.Time in market: Long-term investing typically outperforms market timing.
- 3.Minimize fees: High expense ratios can significantly reduce returns over time.
- 4.Reinvest dividends: Compound growth accelerates wealth building.
- 5.Consider inflation: Real returns = Nominal returns - Inflation rate.