Investment Return Calculator

ROI (Return on Investment) measures the total percentage gain or loss relative to your initial investment. If you invested $10,000 and it's now worth $15,000, your ROI is 50%. Simple and intuitive — but it doesn't account for time. A 50% return over 2 years is very different from 50% over 10 years.

CAGR (Compound Annual Growth Rate) solves this by annualizing the return. It tells you the steady annual rate needed to grow your investment from its initial to final value. That 50% return over 2 years is a 22.5% CAGR. Over 10 years, it's a 4.1% CAGR. CAGR is the gold standard for comparing investments across different time periods and is what professional fund managers report.

Historical benchmarks: the S&P 500 has returned approximately 10% annually (7% after inflation) over the past century. Bonds return 4-6%. Real estate returns 8-12% including rental income and appreciation. A "good" return depends on the risk you're taking — earning 8% in a diversified index fund is excellent; earning 8% in a single speculative stock is mediocre given the risk.

The Rule of 72 provides a quick estimate of doubling time: divide 72 by your annual return rate. At 8% returns, your money doubles every 9 years. At 10%, every 7.2 years. At 12%, every 6 years. This simple mental math helps you evaluate whether an investment's projected return is worth the wait.

A 1% annual fee sounds trivial. It's not. On a $100,000 portfolio earning 8% annually over 30 years: with no fees, you'd have $1,006,000. With a 1% fee (7% net return), you'd have $761,000. That 1% fee cost you $245,000 — nearly a quarter of your wealth. This is why low-cost index funds (0.03-0.10% fees) consistently outperform actively managed funds (0.50-1.50% fees) over long periods.