Investment Return Calculator
Calculate the total return and annualised (CAGR) return on an investment.
Input Data
Results
At a glance:The total return is (end value − begin value) ÷ begin value, reflecting the overall gain over the holding period. The annualised return (CAGR, compound annual growth rate) is (end ÷ begin)^(1 ÷ years) − 1, smoothing the return to a yearly figure. CAGR is useful for comparing investments of different horizons. Note it ignores volatility and assumes a smooth path; actual results fluctuate.
Formula
Total return = (end value − begin value) ÷ begin value.
Annualised return (CAGR) = (end ÷ begin)^(1 ÷ years) − 1.
$$ROI = \dfrac{V_{\text{end}} - V_{\text{begin}}}{V_{\text{begin}}} \times 100\%$$$$CAGR = \left( \left(\dfrac{V_{\text{end}}}{V_{\text{begin}}}\right)^{1/n} - 1 \right) \times 100\%$$How to Use
- Enter the beginning and ending value.
- Set the holding period in years.
- Total return and CAGR are shown instantly.
Total return vs CAGR for a HK$200,000 investment at different horizons
| Holding period | Ending value | Total return | CAGR |
|---|---|---|---|
| 3 years | HK$300,000 | 50% | 14.47% |
| 8 years | HK$320,000 | 60% | 6.05% |
| 15 years | HK$300,000 | 50% | 2.74% |
| 20 years | HK$200,000 | 0% (break-even) | 0.00% |
Illustrative only. CAGR ignores volatility and assumes a smooth compounding path.
Case Studies
Case 1: Fund nearly doubles in 8 years
Mr. Lam invested HK$200,000 in an equity fund 8 years ago; it is now worth HK$320,000.
Absolute gain = 320,000 − 200,000 = HK$120,000; total return ROI = 120,000 ÷ 200,000 = 60%.
Annualised CAGR = ((320,000 ÷ 200,000)^(1/8) − 1) ≈ 6.05%. The 60% ROI looks flashy, but spread over 8 years the ~6% compound return is the true performance — already beating a typical deposit, a reasonable result.
Case 2: High ROI, low CAGR — the long-horizon trap
A property rose from HK$100,000 to HK$200,000 over 20 years — 'doubled' on paper, ROI as high as 100%.
But CAGR = ((200,000 ÷ 100,000)^(1/20) − 1) ≈ 3.53%. Doubling sounds attractive, yet annualised it is only ~3.5%, barely ahead of long-term inflation.
Reminder: for long-term investments never look only at 'how many times it grew'; use CAGR to gauge the real yearly growth speed and avoid overstating performance.
FAQ
What is the difference between total return and CAGR?
Total return (ROI) measures the overall gain over the whole holding period; CAGR annualises it to a smooth yearly rate, making investments of different horizons comparable.
Why does CAGR matter more than ROI?
ROI ignores time. A 100% gain in 2 years (CAGR ~41%) is far better than the same 100% in 20 years (CAGR ~3.5%). CAGR reveals the real speed of wealth growth.
Does CAGR account for volatility?
No. CAGR assumes a smooth path and ignores ups and downs. Two investments with the same CAGR can have very different risk profiles.
How do I read a negative CAGR?
A negative CAGR means the investment lost value on an annualised basis — e.g. falling from HK$200,000 to HK$160,000 over 4 years gives CAGR ≈ −5.6%.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.