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ROI Calculator

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Enter your investment cost and final gain to find return on investment as a percentage, plus the annualized rate if you know the time period.

ROI Calculator

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ROI
50.00%
Net profit
$5,000.00
Annualized ROI
14.47%

The formula

ROI = ((Final value - Cost) / Cost) x 100 Annualized ROI = ( (Final value / Cost)^(1/years) - 1 ) x 100
Example

A $10,000 investment that grows to $15,000 over 3 years: ROI = (15,000-10,000)/10,000 = 50% total, or about 14.47% annualized.

Step-by-step guide

  1. Enter what you invested and the final value or total return.
  2. Enter the time period if you want an annualized rate - useful for comparing investments held for different lengths of time.
  3. Read the total ROI and annualized ROI - the two tell very different stories for long-hold investments.

Why annualized ROI matters for comparing investments

A 50% total return sounds identical whether it took 1 year or 10 years, but those are wildly different outcomes - annualizing converts any return into an equivalent yearly rate, making it possible to fairly compare investments held for different time periods. A 50% return over 10 years is only about 4.14% annualized, quite different from 50% in a single year.

Common mistakes

Comparing total ROI across investments held for very different time periods without annualizing - a longer hold naturally accumulates more total return even at a lower yearly rate.
Ignoring costs beyond the initial purchase - fees, maintenance, taxes, or opportunity cost can all meaningfully change the real ROI beyond a simple entry-to-exit calculation.

Frequently asked questions

What counts as a "good" ROI?

It depends heavily on the type of investment and the risk involved - a real estate flip, a stock portfolio, and a marketing campaign all have very different typical ROI ranges. Compare against similar investments and their typical risk level, not a single universal number.

What's the difference between ROI and CAGR?

They're closely related - annualized ROI (shown here) and CAGR use the same underlying formula. CAGR is typically the term used specifically for multi-year investment growth, while ROI more broadly covers any cost-versus-gain comparison, including one-time projects.

Should ROI include taxes?

This calculator shows a pre-tax figure. For an after-tax comparison, subtract any taxes owed on the gain from the final value before entering it, since tax treatment varies significantly by investment type and jurisdiction.

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