Total ROI answers “how much did I make relative to what I put in?” Annualized return answers “what constant yearly rate would produce that result over this many years?” under a simple compounding model.
Same sample, two numbers
$10,000.00 → $15,000.00 in 3 years:
- Total ROI ≈ 50.00%
- Annualized ≈ 14.47%
Related
Frequently asked questions
Can total ROI and annualized return both be true?
Yes. Total ROI is the full percent change; annualized return is a constant yearly rate that would produce that change over the years entered.
Which should I use?
Use total ROI for the whole holding period. Use annualized when comparing paths with different lengths. Nestfigure does not recommend investments.
Sources linked above include U.S. government materials (for example CFPB, FDIC, NCUA, BLS, IRS) where noted. Sample math uses only labeled Nestfigure assumptions—not bank quotes, job offers, or personalized advice. Last reviewed: August 9, 2026.