CalculateY
Quick Answer
An investment of $10,000 that grows to $15,000 produces a 50% ROI. If that return took 3 years, the annualized ROI (CAGR) is approximately 14.47% per year.
Common Examples
| Input | Result |
|---|---|
| $10,000 initial, $15,000 final | 50% ROI |
| $5,000 initial, $8,000 final, 2 years | 60% ROI / 26.49% annualized |
| $25,000 initial, $32,000 final, 5 years | 28% ROI / 5.06% annualized |
| $100,000 initial, $85,000 final | -15% ROI (loss) |
How It Works
This calculator uses the standard ROI formula:
ROI = ((Final Value − Initial Investment) / Initial Investment) × 100
For annualized ROI over multiple years, the CAGR (Compound Annual Growth Rate) formula is used:
Annualized ROI = ((Final Value / Initial Investment)^(1/years) − 1) × 100
Where:
- ROI = total return as a percentage
- Annualized ROI = equivalent annual return if growth were compounded evenly
- Net Profit = final value minus initial investment
Worked Example
An investor puts $10,000 into a stock that grows to $15,000 over 3 years. Standard ROI = ($15,000 - $10,000) / $10,000 × 100% = 50%. To annualize: CAGR = ($15,000 / $10,000)^(1/3) - 1 = (1.5)^0.3333 - 1 = 0.1447, or approximately 14.47% per year.
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