Calculate return on investment, net profit, annualized return (CAGR), and inflation-adjusted real return
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Founder & CEO, Toolraxy
Faiq Ur Rahman is a web designer, digital product developer, and founder of Toolraxy, a growing platform of web-based calculators and utility tools. He specializes in building structured, user-friendly tools focused on health, finance, productivity, and everyday problem-solving.
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A raw ROI percentage only tells part of the story. Two investments can both return 40%. One took six months, the other took nine years. The first is far better, but the basic formula hides that. That’s why this ROI calculator outputs CAGR alongside total return. It also separates nominal returns from real returns, so you can see whether your money actually gained purchasing power or just kept pace with inflation. The tool was built for anyone running numbers on a stock position, a rental property, a small business, or a retirement account.
Pick your currency from the dropdown. All money fields update to show the matching symbol.
Enter your initial investment, the amount you put in at the start.
Add the final or current value of the investment.
Include any additional costs such as brokerage fees, closing costs, or taxes paid.
Enter income received along the way, like dividends, rent, or interest.
Set the holding period in years. Decimals work — use 0.5 for six months or 2.75 for two years and nine months.
Type an annual inflation rate. The default 2.5% reflects long-run U.S. averages, but you can change it.
Tap Calculate. The result updates automatically, but the button forces a fresh computation.
The calculator runs four formulas in sequence. Each one builds on the last.
Formula: Net Profit = (Final Value + Income) − (Initial Investment + Costs)
Formula: ROI % = (Net Profit ÷ Total Invested) × 100
Formula: CAGR % = ((Proceeds ÷ Invested)^(1 ÷ Years) − 1) × 100
Formula: Real CAGR % = ((1 + CAGR ÷ 100) ÷ (1 + Inflation ÷ 100) − 1) × 100
Total Invested is your initial investment plus any additional costs. Proceeds is the final value plus income received. Net Profit is proceeds minus total invested. ROI turns that into a percentage of what you put in. CAGR spreads the return evenly across every year of the holding period, which makes investments of different lengths comparable. Real CAGR strips out inflation so you see the change in purchasing power, not just the nominal number.
The tool also computes a return multiple, which is simply proceeds divided by invested. A multiple of 1.5 means you got back 50% more than you put in. A multiple below 1.0 means you lost money, no matter what the ROI percentage says.
Worked Example
You bought $7,200 worth of an index fund 4.5 years ago. You paid $180 in platform fees when you bought in. The fund paid $240 in dividends over the years, which you didn’t reinvest. Today the position is worth $9,850.
Total invested: $7,200 + $180 = $7,380.
Total proceeds: $9,850 + $240 = $10,090.
Net profit: $10,090 − $7,380 = $2,710.
ROI: $2,710 ÷ $7,380 × 100 = 36.72%.
CAGR: (10,090 ÷ 7,380)^(1 ÷ 4.5) − 1 = 0.0720, or 7.20%.
Return multiple: 10,090 ÷ 7,380 = 1.37×.
Now assume inflation ran at 3.2% a year during that stretch. Real CAGR: (1.0720 ÷ 1.032 − 1) × 100 = 3.88%.
The tool would place this in the Moderate category. A 7.2% annualized return is right at long-term broad market averages. The real return of 3.88% means your purchasing power grew by nearly 4% a year after inflation, which is a solid outcome over four and a half years. Change the holding period to 1.5 years with the same dollar figures and CAGR jumps above 25%, landing in Very strong. Same dollars, different time frame, different verdict.
Divide your net profit by your total investment, then multiply by 100. Net profit is what you got back minus what you put in, including costs. If you invested $8,000 and ended with $11,000, your net profit is $3,000 and your ROI is 37.5%.
Long-run equity benchmarks sit around 7% to 10% annualized before inflation. Real estate and small business returns vary more. Anything above 15% annualized sustained for years is exceptional. The right benchmark depends on what you’re comparing against and how much risk you took.
ROI is total return across the whole holding period. CAGR is the equivalent annual return. If you tripled your money in 10 years, ROI is 200% and CAGR is roughly 11.6% a year. CAGR is better for comparing investments held for different lengths of time.
Your proceeds came in below your total invested amount. That means the investment lost value, fees ate the gain, or you’re measuring during a drawdown. A negative ROI in a single year isn’t unusual for stocks. What matters is the trend over the full holding period.
Take proceeds divided by invested, raise it to the power of one over years, subtract one, multiply by 100. If you doubled your money in six years, the calculation is 2^(1/6) − 1 = 0.1225, or about 12.25% per year. The calculator does this step for you.
Real return is your nominal return adjusted for inflation. It shows whether your purchasing power grew. The formula is (1 + nominal) ÷ (1 + inflation) − 1. An 8% nominal return during 3% inflation produces about 4.85% real.
In this calculator, dividends and other income go in the Income Received field. If you leave that field at zero, your ROI will only reflect price appreciation. Including income gives a truer picture of total return, which is what most professional benchmarks report.
Yes. Enter the purchase price as the initial investment. Add closing costs and any renovation expenses to the additional costs field. Net rental income goes in the income field. Sale price goes in the final value. The holding period is how many years you owned the property.
Return multiple is proceeds divided by invested. A 2.5× multiple means you got back two and a half times what you put in. It’s a quick way to see how many times over your money was returned, without worrying about percentages.
Use CAGR, not raw ROI. A 20% return over two years and a 20% return over ten years look identical on a raw ROI basis, but the two-year investment compounded to about 9.5% a year while the ten-year one came in at 1.8%. CAGR is the fair comparison.
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