ROI Calculator
ROI is the simplest measure of whether an investment was worthwhile. This calculator gives you both simple ROI and annualised ROI for fair comparison across different time periods.
Simple vs Annualised ROI
Simple ROI Formula
ROI = (Final Value − Initial Cost) ÷ Initial Cost × 100. A £10,000 investment returning £14,500 = 45% ROI. Simple but doesn't account for time.
Annualised ROI (CAGR)
CAGR = (Final Value / Initial Value)^(1/years) − 1. This is the better metric for comparing investments held for different periods. 45% over 3 years = 13.2% annualised — very comparable to typical equity market returns.
Opportunity Cost
Always compare ROI against alternatives. A 5% annual return looks good in isolation but poor versus a 10% index fund. The true question is always: what else could this money have earned?
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