Investment & ROI Calculator

Understanding investment returns

Return on investment (ROI) measures how much your money has grown relative to what you put in. A 100% ROI means you doubled your money. This calculator shows both your total ROI and the annualized (CAGR) equivalent so you can compare against benchmarks.

The compound growth formula

With regular contributions and periodic compounding:

FV = P × (1 + r/n)^(n×t) + C × ((1 + r/n)^(n×t) − 1) / (r/n)

P = initial investment
C = contribution per compounding period
r = annual return rate (decimal)
n = compounding periods per year
t = investment period in years

Dollar-cost averaging

Investing a fixed amount each month — regardless of market conditions — means you buy more shares when prices are low and fewer when prices are high. Over time this smooths out volatility and removes the stress of market timing. The monthly contribution slider models exactly this approach.

Historical context

The S&P 500 has returned roughly 10% per year (nominal) since 1926. After adjusting for inflation, the real return is closer to 7%. Bond indices have averaged 5-6% nominally. Use these as anchors when setting your expected return — but remember, past performance does not guarantee future results.

A note on inflation

This calculator shows nominal values. To estimate real (inflation-adjusted) growth, subtract the expected inflation rate (historically 2-3%) from your annual return input. For example, entering 7% models a roughly inflation-adjusted S&P 500 return.