How to use
- Use ROI when you want the full holding-period return.
- Use CAGR when you need the annualized return and know the number of years.
- Use compare two scenarios when the holding periods differ and CAGR should lead the comparison.
Wave 1 investing expansion
Period return, annualized return, and side-by-side comparison
This page does not model cash flows, monthly contributions, IRR, XIRR, inflation, or fees. It is intentionally narrow: initial value, final value, years, and comparison clarity.
Inputs
ROI mode reads total holding-period return. CAGR mode uses the same inputs but treats years as required.
Scenario A
Scenario B
Compare mode always asks for years because the whole point is to compare total return against annualized return consistently.
Scenario comparison
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| Metric | Scenario A | Scenario B | A minus B |
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ROI vs CAGR
ROI answers, “How much did this investment gain or lose over the whole period?” It is a period return. CAGR answers, “What steady annual rate would produce the same ending value?”
If two investments ran for different lengths of time, a higher ROI does not necessarily mean stronger annual performance. That is the main reason this page keeps both metrics visible at once.
How this differs from compound interest
Use Compound Interest Calculator when you know a rate and want to project a future value from time and optional contributions. Use this page when you already know the starting value and ending value and want to read the realized return back out.
FAQ
What is the difference between ROI and CAGR?
ROI is the total return over the whole holding period. CAGR is the annualized rate that would turn the initial value into the final value over the stated number of years.
How is this different from the compound interest calculator?
This page reads return from a start value and an end value. The compound calculator projects future value from a rate, time, and optional contributions.
Why should I not annualize short-term ROI by intuition?
A short holding period can show a large simple ROI that is not directly comparable to annual returns. CAGR uses the stated number of years to annualize the result consistently.
Can I compare two scenarios with different holding periods?
Yes. The compare mode shows ROI and CAGR for both scenarios, then warns when the holding periods differ so you compare CAGR first.