Orpheus

Return on Investment Calculator

Total return, and the annualised rate that lets you compare.

Inputs
Total return
50%
LosingBelow inflationMarket-likeStrongExceptional
Profit
5,000.00
Annualised (CAGR)
14.47%
Multiple on money
1.5×
ROI = (gain − cost) ÷ cost · annualised = (1 + ROI)^(1/years) − 1

50% over 3 years is 14.47% a year — that is the figure to compare against anything else.

Every tool runs entirely in your browser. Your files are never uploaded to a server.

ROI is profit divided by the amount invested. A 10,000 investment now worth 15,000 has returned 50%. Held for three years, that is 14.5% a year — the annualised figure, which is what you compare against other options.

How to use ROI Calculator

  1. Enter what you put in. The total invested, including fees and costs where you can.
  2. Enter what it is worth. Current value, or the amount you sold for.
  3. Enter the years held. This is what turns a total return into a comparable annual rate.

About calculating return on investment

Return on investment is a deceptively simple ratio: what you gained divided by what you put in. Its weakness is that it contains no time dimension at all, which makes the headline percentage nearly useless for comparison. A 60% return is spectacular over one year, ordinary over five and poor over fifteen, yet all three are quoted the same way — and the longer holding is the one whose number tends to get advertised. Annualising fixes it. The compound annual growth rate is the steady yearly rate that would have produced the same ending value, and because it is expressed per year it can be set beside a savings rate, a bond yield or an index return directly. It is worth knowing what it hides as well: CAGR smooths the path entirely, so a holding that halved and then quadrupled reports the same figure as one that rose gently, and the two are not the same experience or the same risk. Two adjustments make the result honest. Include every cost — fees, commissions, taxes — because they come out of your return whether or not you count them, and an annual fee compounds against you on exactly the same curve that returns compound for you. And compare against inflation rather than zero: a 3% annual return during 4% inflation is a positive number describing a loss of purchasing power.

Frequently asked questions

Why does the annualised return matter more than the total?
Because a total return says nothing about time. Doubling your money is outstanding in two years and unremarkable in twenty. The annualised rate — often called CAGR — expresses both as a yearly figure, which is the only fair way to compare investments held for different periods.
What is CAGR?
Compound annual growth rate: the constant yearly rate that would take the starting value to the ending value over the period. It smooths out the path, so a holding that fell then recovered shows the same CAGR as one that rose steadily to the same place.
Should I include fees in the cost?
Yes, and taxes where they apply. Platform fees, transaction costs and management charges come out of your return whether or not you count them, and a percentage point of annual fee compounds against you exactly as returns compound for you.
What counts as a good ROI?
Measure against the alternative you gave up. Broad stock markets have returned roughly 7% a year after inflation over long periods, so an investment tying up money and capital for less than that has to justify itself. Anything below the inflation rate is losing purchasing power despite showing a positive number.
Does this work for marketing spend?
The arithmetic does — put in campaign cost and revenue attributed to it. Be careful about attribution, though: revenue that would have arrived anyway is not a return on the campaign, and that is the hardest part of the calculation rather than the maths.

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