Investment Return Calculator (ROI)

Investment return and CAGR (Compound Annual Growth Rate) measure how well an investment has performed and how to compare investments of different durations on an equal basis.

Total return formula: Total Return (%) = ((Ending Value − Starting Value + Dividends) ÷ Starting Value) × 100

CAGR formula: CAGR = (Ending Value ÷ Starting Value)^(1 ÷ Years) − 1

CAGR answers: “What single annual growth rate, compounded every year, would produce the same total result?”

Rule of 72 (quick mental math for doubling time): Years to Double ≈ 72 ÷ Annual Return (%)

At 8% CAGR: 72 ÷ 8 = 9 years to double At 12% CAGR: 72 ÷ 12 = 6 years to double

Real return (inflation-adjusted): Real Return = ((1 + Nominal Return) ÷ (1 + Inflation Rate)) − 1

Historical US inflation: ~3% average long-term. A 10% nominal return in a 3% inflation environment yields a real return of: (1.10 ÷ 1.03) − 1 = 6.8% real return.

Benchmark CAGR reference values:

• US S&P 500 (1926–2024): ~10.0% nominal CAGR (~7% real)
• Global stocks (MSCI World, 1970–2024): ~8.5% nominal CAGR
• US bonds (10-year Treasury, long-term avg): ~4–5% nominal
• Gold (1971–2024): ~7.8% nominal CAGR
• US real estate (Case-Shiller, 1987–2024): ~4.5% nominal CAGR
• Savings account (current, 2024): 4–5% (high-rate environment); normally 0.5–2%

Worked example: You invested $15,000 in an index fund 7 years ago. The position is now worth $26,450, and you took $1,200 of dividends as cash over that period rather than reinvesting them.

• Total ending value: $26,450 + $1,200 = $27,650
• Total return: ($27,650 − $15,000) ÷ $15,000 × 100 = 84.33%
• CAGR: ($27,650 ÷ $15,000)^(1/7) − 1 = (1.8433)^0.1429 − 1 = 9.13% per year

Watch the double-count. The dividends field is for income you took out and hold separately. If your dividends were automatically reinvested, they are already inside the $26,450 and entering them again inflates the return. Reinvested means leave the field blank. Taken as cash means enter the total.

Getting that wrong on this example is the difference between 84.33% and 76.33%, and between a 9.13% and an 8.44% CAGR, which is enough to move a fund from “beat the market” to “did not”.