What is annualized ROI?

Annualized ROI expresses your total return as an equivalent per-year rate, assuming compounding. The formula is ((gain / cost)^(1 / years) - 1) x 100. This lets you compare investments held for different periods on a like-for-like basis.

Why does annualized ROI matter?

A 50% total return sounds great until you learn it took 10 years. Annualizing reveals that 50% over 10 years is about 4.1% per year, which makes comparing investments far easier. It is the standard way to report investment performance.

How is this different from CAGR?

Annualized ROI and compound annual growth rate (CAGR) describe the same calculation: the constant yearly growth rate that would take your starting value to your ending value over the holding period.

Is my data shared with any server?

All math runs in your browser. Our servers are not involved at any point.

Annualized ROI Calculator

Calculate the annualized return on an investment held for any period up to 100 years. Enter the initial cost, final value, and holding period in years. The calculator uses the compound annual growth rate formula and runs locally in your browser.

Calculation mode

Currency

Initial cost

Final value (total returned)

Holding period (years)

Formula: Annualized ROI % = ((gain / cost)^(1 / years) - 1) x 100

Annualized ROI

20.00%

Net gain: $2,000.00
Multiplier: 1.20x
Initial cost: $10,000.00
Final value (total returned): $12,000.00

Calculations are estimates for informational purposes only. Consult a financial professional for advice.

How it works

Simple ROI uses the formula ROI % = ((gain - cost) / cost) x 100. Annualized ROI uses ((gain / cost)^(1 / years) - 1) x 100, which expresses total return as an equivalent constant per-year rate. Marketing ROI applies the same simple-ROI arithmetic to ad spend and attributed revenue, with the additional ROAS multiplier shown alongside the percentage.

Processing runs in your browser

Every calculation runs locally in your browser as JavaScript. Our servers are not involved at any point.

Calculations are estimates for informational purposes only. Consult a financial professional for advice.

Frequently asked questions

What is annualized ROI?: Annualized ROI expresses your total return as an equivalent per-year rate, assuming compounding. The formula is ((gain / cost)^(1 / years) - 1) x 100. This lets you compare investments held for different periods on a like-for-like basis.
Why does annualized ROI matter?: A 50% total return sounds great until you learn it took 10 years. Annualizing reveals that 50% over 10 years is about 4.1% per year, which makes comparing investments far easier. It is the standard way to report investment performance.
How is this different from CAGR?: Annualized ROI and compound annual growth rate (CAGR) describe the same calculation: the constant yearly growth rate that would take your starting value to your ending value over the holding period.
Is my data shared with any server?: All math runs in your browser. Our servers are not involved at any point.

Last reviewed September 30, 2026

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