ROI Calculator
Calculate return on investment and compare the profitability of different investments.
Amount you invested
Current or ending value
Optional: for annualized ROI
ROI = ((Final Value - Initial) / Initial) × 100
Positive ROI: Your investment has gained value
Negative ROI: Your investment has lost value
Annualized ROI: Average yearly return (useful for comparing investments with different time periods)
Related Calculators
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Calculate compound interest and see how your investments can grow over time.
Average Return Calculator
Calculate annualized average return (CAGR) between a starting and ending value.
IRR Calculator
Estimate internal rate of return based on initial investment, cash flows, and exit value.
Return on Investment
+50%
+14.47% per year
Ad Space
970×90
What is ROI?
ROI (Return on Investment) is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment's cost.
How it Works
The basic formula for ROI is simple:
To calculate Annualized ROI (CAGR), which accounts for the time period:
Where n is the number of years.
Example Calculation
Suppose you invested $10,000 and after 3 years it is worth $15,000.
Total Gain: $15,000 - $10,000 = $5,000
ROI: ($5,000 / $10,000) × 100 = 50%
Annualized ROI: [($15,000 / $10,000)^(1/3) - 1] × 100
= [1.5^(0.333) - 1] × 100
= [1.1447 - 1] × 100 = 14.47%
Frequently Asked Questions
What is a good ROI?
A 'good' ROI depends on the risk and the time horizon. For stock market investments, a long-term average of 7-10% annually is often considered good. For safer investments like bonds, 3-5% might be considered good.
Does ROI include time?
Standard ROI does not account for the time period. A 20% ROI over 1 year is much better than a 20% ROI over 10 years. That's why Annualized ROI is often a better metric for comparison.
Can ROI be negative?
Yes, if the final value of the investment is less than the initial cost, the ROI will be negative, indicating a loss.
How do taxes affect ROI?
This calculator calculates gross ROI (before taxes). To calculate net ROI, you would need to subtract taxes and fees from the final value or total gain.
What is the difference between ROI and Profit Margin?
ROI measures the efficiency of an investment relative to its cost. Profit margin measures how much of sales revenue is profit. ROI is usually for investments; profit margin is for business operations.