The ROI calculator below can show you the return on your past investments, as well as projected investment returns. You can use it to measure annual returns to see whether certain holdings or projects are worthwhile.
To find the total and annual returns, enter your starting and ending amounts. Then below that, you can select the time frame. This investment tool automatically updates with your results.
Simple ROI Calculator Explained
In the business and investing world, you’ll often hear ROI. What’s the return on investment? This question can help you focus on more productive projects. Sometimes it’s hard to quantify returns when looking forward… but it’s important to try. As you gain business and investment experience, you can become better at projecting future returns.
Now, what’s happening behind the scenes of this tool? The return on investment calculator above has a few formulas behind it…
Investment Gain: Ending Amount – Starting Amount
The total investment gain as a dollar amount is nice to know. Although as a stand-alone, it doesn’t give much insight into the profitability. That’s why we’ve included two other results in the ROI calculator with their formulas explained below.
ROI Formula: (Ending Amount – Starting Amount) ÷ Starting Amount
This calculation will give you the total return on investment as a percentage. Then to figure out the annual growth rate, the calculator uses the compound annual growth rate (CAGR) formula. Here’s what that looks like…
CAGR Formula: (Ending Amount ÷ Starting Amount)^(1 ÷ Number of Years) – 1 * 100
There are more steps because it has to factor in different time frames. But the result can be more useful. It helps when comparing multiple investments or projects to each other.
These are some core financial concepts. Whether you’re an investor or not, this knowledge comes in handy. And if you want to learn more about investing, you can sign up for our free e-letter below. It’s packed with easy-to-understand insight from investing experts.
Please reach out if you have any questions about our ROI calculator. And feel free to bookmark this page, as well as share it with friends and family. For a next step, you can check out our more detailed Investment Calculator. It’s also free, and it shows you how big your portfolio can grow after five, 10 or 20 years.
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