Investment Returns: Understanding ROI, CAGR, and Total Return
Measuring investment performance correctly is crucial for making informed decisions. Many investors confuse total return with annualized return, or forget to include dividends...
Investment Return Calculator
Calculate ROI, CAGR, and compare investment performance
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Formula
Formula
CAGR = (Ending Value / Beginning Value)^(1/n) - 1
CAGR calculates the steady annual growth rate. Total return includes all gains (price + dividends) divided by total invested.
How to Calculate Manually
- 1 Enter your initial investment amount
- 2 Enter the current or final value
- 3 Enter the time period in years
- 4 Add any dividends or interest received
- 5 Add any additional contributions made
- 6 Calculate total gain: final + dividends - initial - additional
- 7 Calculate total return: gain / total invested × 100
- 8 Calculate CAGR: (final/initial)^(1/years) - 1
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Reference Table
| Asset Class | Historical CAGR (Nominal) | Historical CAGR (Real) |
|---|---|---|
| US Large Cap Stocks (S&P 500) | 10.5% | 7.3% |
| US Small Cap Stocks | 11.9% | 8.6% |
| International Stocks | 8.5% | 5.3% |
| US Bonds (10-Year Treasury) | 4.8% | 1.7% |
| Corporate Bonds | 5.9% | 2.8% |
| Real Estate (REITs) | 10.2% | 7.0% |
| Gold | 5.1% | 1.9% |
| Cash/T-Bills | 3.1% | 0.0% |
Frequently Asked Questions
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What is CAGR?
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How is total return different from annualized return?
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Should I include dividends in return calculation?
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