Today I learned that a 20% ROI over 5 years is only about 3.7% per year.

I always thought a 20% ROI sounded great.

Then I realized I was comparing investments completely wrong.

If Investment A returns 20% in one year and Investment B returns 20% over five years, they obviously aren't equally good investments.

The second investment only earns about 3.7% annually.

That sent me down a rabbit hole of ROI, CAGR, and annualized returns, and I ended up building a calculator to compare them.

One thing that surprised me was how many online calculators don't show annualized ROI at all.

If anyone wants to play with different scenarios, here's the calculator I built:

I'd also love to hear how you compare investment performance.

Posted Jul 13, 2026, 4:34 PM UTC