ROI Calculator
Calculate your Return on Investment, annualized CAGR, profit multiple, and breakeven time. Switch modes to work forward or backward. Everything runs in your browser.
Growth Comparison — $10,000 over 6 years
How the same investment grows at different annual return rates (compounded yearly).
| Annual Return | Final Value | Net Profit | Total ROI % |
|---|
How ROI and CAGR Are Calculated
ROI Formula
ROI (%) = (Net Profit / Initial Investment) × 100 Net Profit = Final Value − Initial Investment Annualized ROI (CAGR)
CAGR = (Final Value / Initial Value)1/years − 1 Rule of 72 (doubling time)
Years to double ≈ 72 / Annual Return % Worked Example
You invest $10,000 and it grows to $18,000 after 6 years:
- Net Profit = $18,000 − $10,000 = $8,000
- ROI = ($8,000 / $10,000) × 100 = 80%
- Profit Multiple = $18,000 / $10,000 = 1.80×
- CAGR = (18,000/10,000)1/6 − 1 = 1.80.1667 − 1 ≈ 10.29% per year
- Rule of 72: 72 / 10.29 ≈ 7.0 years to double at this rate
Reference: Growth of $10,000 Over Time
| Years | 5% / yr | 7% / yr | 10% / yr | 15% / yr | 20% / yr |
|---|---|---|---|---|---|
| 1 | $10,500 | $10,700 | $11,000 | $11,500 | $12,000 |
| 2 | $11,025 | $11,449 | $12,100 | $13,225 | $14,400 |
| 3 | $11,576 | $12,250 | $13,310 | $15,209 | $17,280 |
| 5 | $12,763 | $14,026 | $16,105 | $20,114 | $24,883 |
| 10 | $16,289 | $19,672 | $25,937 | $40,456 | $61,917 |
| 15 | $20,789 | $27,590 | $41,772 | $81,371 | $154,070 |
| 20 | $26,533 | $38,697 | $67,275 | $163,665 | $383,376 |
| 30 | $43,219 | $76,123 | $174,494 | $662,118 | $2,373,763 |
Values assume annual compounding. Initial investment: $10,000.
Frequently Asked Questions
What is the difference between ROI and CAGR?
ROI (Return on Investment) is the total percentage gain over the entire holding period: ROI% = (Net Profit / Initial Investment) × 100. It does not account for how long the investment was held. CAGR (Compound Annual Growth Rate) is the annualized ROI — it tells you what constant yearly return would produce the same total result over the same number of years: CAGR = (Final Value / Initial Value)^(1/years) − 1. For a 1-year investment ROI and CAGR are identical. For longer periods, CAGR is a fairer comparison because it normalizes for time.
What is a good ROI?
A "good" ROI depends entirely on the asset class and time horizon. As a rough benchmark: the S&P 500 has historically returned about 10% per year (7% after inflation). Real estate in the US has averaged 8–12% annually including rental income. Individual stocks vary widely. High-risk investments like startups or crypto might target 20%+ but come with substantial loss risk. For business investments, a common rule of thumb is that the ROI should exceed the cost of capital (typically 8–15% for most businesses).
What is the average stock market ROI per year?
The S&P 500 index has delivered an average annualized return of approximately 10.5% per year over the last 50 years (roughly 7–7.5% after adjusting for inflation). This includes dividends reinvested. Individual years vary dramatically — from +34% (1995) to −38% (2008). This 10% figure is often used as the "market average" baseline when evaluating whether an investment beats the market.
What does the Rule of 72 mean?
The Rule of 72 is a quick mental math shortcut to estimate how many years it takes to double an investment at a fixed annual return. Divide 72 by the annual ROI percentage: at 8% per year, your money doubles in roughly 72 / 8 = 9 years. At 12% it doubles in about 6 years. It works because of the mathematics of compounding and is accurate to within 1–2% for returns between 2% and 20%.
How is annualized ROI (CAGR) calculated?
CAGR = (Final Value / Initial Value) ^ (1 / Number of Years) − 1. For example, if you invested $10,000 and it grew to $18,000 over 6 years: CAGR = (18,000 / 10,000)^(1/6) − 1 = 1.8^0.1667 − 1 ≈ 0.1029 = 10.29% per year. This means the investment compounded at about 10.29% annually to reach its final value.
What is ROI vs profit margin?
ROI measures the return relative to the cost of the investment: ROI% = (Net Profit / Cost) × 100. Profit margin measures profit relative to revenue: Margin% = (Net Profit / Revenue) × 100. They answer different questions. ROI tells you how efficiently capital was deployed (relevant for investors). Profit margin tells you how much of each sale converts to profit (relevant for operations). A business can have a high profit margin but low ROI if it required enormous capital, or a low margin but high ROI on a very small investment.