/* Calculator Styles */
.ror-calculator-container {
max-width: 600px;
margin: 20px auto;
padding: 25px;
background: #f9f9f9;
border: 1px solid #e0e0e0;
border-radius: 8px;
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
}
.ror-input-group {
margin-bottom: 15px;
}
.ror-input-group label {
display: block;
margin-bottom: 5px;
font-weight: 600;
color: #333;
}
.ror-input-wrapper {
position: relative;
display: flex;
align-items: center;
}
.ror-currency-symbol {
position: absolute;
left: 10px;
color: #555;
font-weight: bold;
}
.ror-input-field {
width: 100%;
padding: 10px 10px 10px 25px; /* Padding left for symbol */
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
color: #333;
}
.ror-input-field.no-symbol {
padding-left: 10px;
}
.ror-btn {
width: 100%;
padding: 12px;
background-color: #2c3e50;
color: #fff;
border: none;
border-radius: 4px;
font-size: 16px;
font-weight: bold;
cursor: pointer;
transition: background-color 0.3s;
margin-top: 10px;
}
.ror-btn:hover {
background-color: #34495e;
}
.ror-results {
margin-top: 25px;
padding: 20px;
background-color: #fff;
border: 1px solid #ddd;
border-radius: 4px;
display: none; /* Hidden by default */
}
.ror-result-row {
display: flex;
justify-content: space-between;
margin-bottom: 10px;
padding-bottom: 10px;
border-bottom: 1px solid #eee;
}
.ror-result-row:last-child {
border-bottom: none;
margin-bottom: 0;
padding-bottom: 0;
}
.ror-result-label {
color: #555;
font-weight: 500;
}
.ror-result-value {
font-weight: 700;
color: #2c3e50;
}
.ror-highlight {
color: #27ae60;
font-size: 1.2em;
}
/* Article Styles */
.ror-article {
max-width: 800px;
margin: 40px auto;
font-family: inherit;
line-height: 1.6;
color: #333;
}
.ror-article h2 {
color: #2c3e50;
border-bottom: 2px solid #eee;
padding-bottom: 10px;
margin-top: 30px;
}
.ror-article h3 {
color: #34495e;
margin-top: 25px;
}
.ror-article p {
margin-bottom: 15px;
}
.ror-article ul {
margin-bottom: 20px;
padding-left: 20px;
}
.ror-article li {
margin-bottom: 8px;
}
function calculateCAGR() {
var initialInput = document.getElementById('ror-initial');
var finalInput = document.getElementById('ror-final');
var yearsInput = document.getElementById('ror-years');
var initialVal = parseFloat(initialInput.value);
var finalVal = parseFloat(finalInput.value);
var years = parseFloat(yearsInput.value);
var resultsDiv = document.getElementById('ror-results');
// Validation
if (isNaN(initialVal) || isNaN(finalVal) || isNaN(years)) {
alert("Please enter valid numbers for all fields.");
resultsDiv.style.display = 'none';
return;
}
if (initialVal === 0) {
alert("Initial Value cannot be zero.");
resultsDiv.style.display = 'none';
return;
}
if (years <= 0) {
alert("Number of years must be greater than zero.");
resultsDiv.style.display = 'none';
return;
}
// Calculation Logic
// Total Absolute Growth ($)
var absoluteGrowth = finalVal – initialVal;
// Total Percentage Return (%)
var totalPercentReturn = (absoluteGrowth / initialVal) * 100;
// CAGR Formula: (EV / BV)^(1 / n) – 1
// Handle cases where ratio is negative (though rare in basic investment context, math needs to be safe)
// CAGR works best with positive numbers. If Final Value is negative, CAGR is undefined in real numbers.
var cagr = 0;
if (finalVal 0) {
// Simple decline handling, though power function fails for negatives
cagr = -100;
} else {
var ratio = finalVal / initialVal;
if (ratio = 0) {
cagrDisplay.style.color = "#27ae60"; // Green
} else {
cagrDisplay.style.color = "#c0392b"; // Red
}
resultsDiv.style.display = 'block';
}
How to Calculate Rate of Return Over Multiple Years
Calculating the performance of an investment over a single year is straightforward: you divide the profit by the initial investment. However, calculating the rate of return over multiple years requires a more sophisticated approach to account for the effects of compounding. This metric is known as the Compound Annual Growth Rate (CAGR).
The CAGR smooths out the volatility of an investment's returns over a period of time, providing a theoretical steady rate at which the investment would have grown if it had grown at the same rate every year.
The Annualized Return Formula
To calculate the rate of return over multiple years, you need three specific data points:
- Beginning Value (BV): The amount you started with.
- Ending Value (EV): The amount you have at the end of the period.
- Number of Years (n): The duration of the investment.
The formula for CAGR is:
CAGR = ( Ending Value / Beginning Value )(1 / n) – 1
Step-by-Step Calculation Example
Let's say you invested $10,000 in a mutual fund, and 5 years later, your portfolio is worth $18,000. Here is how you calculate your annualized return:
- Determine the Total Growth Ratio: Divide the Final Value by the Initial Value.
$18,000 / $10,000 = 1.8
- Account for Time: Raise the result to the power of one divided by the number of years (1/5 or 0.2).
1.80.2 ≈ 1.1247
- Convert to Percentage: Subtract 1 from the result.
1.1247 – 1 = 0.1247
- Final Result: Multiply by 100 to get the percentage.
0.1247 * 100 = 12.47%
This means your investment grew at an effective rate of 12.47% per year, compounding annually.
Why Not Use Simple Average Return?
A common mistake is to calculate the total percentage growth (80% in the example above) and simply divide it by the number of years (5). This would give you 16%. However, this is incorrect because it ignores compounding. If your money actually grew by 16% every year, $10,000 would turn into roughly $21,000 in 5 years, not $18,000.
Using the CAGR calculator above ensures you understand the true efficiency of your capital over long time horizons, allowing you to compare investments of different durations on an apples-to-apples basis.