Annualized ROI Calculator
Turn a total return into a yearly rate, so investments held for different lengths of time can be compared fairly.
Type any value — results update as you type.
Annualized ROI formula
Annualized ROI is the constant yearly return that would turn your starting amount into your final amount over the same period. It is also called the compound annual growth rate (CAGR).
For periods given in months, divide by 12 first: 18 months = 1.5 years.
Example
- Investment A: 10,000 → 14,500 in 3 years. Total ROI 45%, annualized 13.19%.
- Investment B: 10,000 → 12,000 in 1 year. Total ROI 20%, annualized 20%.
Investment A has the bigger total return, but B grew faster each year.
Why not just divide by the number of years?
Dividing 45% by 3 gives 15%, which overstates the yearly return because it ignores compounding: gains in later years are earned on top of earlier gains. The formula above takes that into account.
Frequently asked questions
Is annualized ROI the same as CAGR?
Yes. Both describe the constant yearly growth rate between a starting and an ending value.
Can I annualize a return for less than a year?
You can, but short-period returns scaled up to a year can look extreme and are rarely repeatable. Treat them with care.
Does annualized ROI include dividends or rent?
Include them in the final value if you reinvested or kept them. Otherwise the result only reflects the change in price.