How this ROI calculator works
ROI measures total profit or loss relative to the money invested. This calculator treats the initial investment plus entered fees and costs as the invested cost. It subtracts entered taxes from the final value to calculate net proceeds.
Net ROI = (Net proceeds − Invested cost) ÷ Invested cost × 100
Invested cost = initial investment + fees and other costs. Net proceeds = final value − entered taxes.
ROI vs CAGR
ROI is the total percentage return for the entire holding period; it does not account for time. CAGR annualizes the start-to-end change, making different holding periods easier to compare. CAGR is a smoothed mathematical rate and does not describe year-by-year volatility.
| Measure | Uses time? | Best for |
|---|---|---|
| ROI | No | Total profit or loss relative to cost |
| CAGR | Yes | Smoothed annualized start-to-end comparison |
| Real CAGR | Yes | Annualized return after the entered inflation assumption |
Continue your financial analysis
Project regular contributions with the SIP Calculator, examine compounding frequency with the Compound Interest Calculator, or compare purchasing power with the Inflation Calculator. For a business sale rather than an investment return, use the Profit Margin Calculator.
Learn from official investor resources
Investor.gov explains how fees and expenses affect investment portfolios and provides an official compound interest calculator. External resources open in a new tab.