ROI Calculator
ROI (Return on Investment) measures profitability as a percentage. Formula: ROI = (Net Profit / Cost) × 100. For example, buying stock for $1,000 and selling for $1,300 = 30% ROI. Include all costs (fees, taxes) and gains (dividends, appreciation). Annualized ROI accounts for time: [(End Value / Start Value)^(1/years) - 1] × 100. A 50% ROI over 5 years = 8.45% annualized. Compare investments fairly by annualizing returns.
Calculate Return on Investment (ROI), annualized ROI, and total dollar returns. Compare multiple investments side by side. Reverse mode finds the final value needed for a target ROI. Includes presets for stock market, real estate, and savings accounts.
What do you want to do?
Calculate ROI from initial and final values
Quick Presets
Initial Investment
Final Value
Time Period
Total ROI
50.00%
Annualized ROI
14.47%
Total Return
$5,000.00
Investment Breakdown
Summary: An investment of $10,000.00 that grew to $15,000.00 over 3 years achieved a 50.00% total return (14.47% annualized).
Understanding ROI
- ROI = (Final Value − Initial Investment) / Initial Investment × 100
- Annualized ROI accounts for time, making investments of different durations comparable
- Annualized ROI = (Final / Initial)1/years − 1
- A negative ROI means the investment lost money
- Always compare annualized ROI when investment periods differ
How to Use
- Enter your value in the input field
- Click the Calculate/Convert button
- Copy the result to your clipboard
Frequently Asked Questions
- What is ROI and how is it calculated?
- ROI (Return on Investment) measures the profitability of an investment as a percentage. Formula: ROI = (Final Value − Initial Investment) / Initial Investment × 100. For example, investing $10,000 that grows to $15,000 has an ROI of 50%. A positive ROI means profit; negative means loss.
- What is annualized ROI and why does it matter?
- Annualized ROI converts total returns to an equivalent yearly rate, enabling fair comparison between investments held for different time periods. Formula: Annualized ROI = (Final/Initial)^(1/years) − 1. A 50% return over 5 years is ~8.4% annualized, while 30% over 2 years is ~14% annualized — the shorter investment actually performed better per year.
- What is a good ROI?
- A "good" ROI depends on the investment type and risk level. Benchmarks: S&P 500 stock market averages ~10% annually (before inflation). Real estate typically returns 8-12%. Savings accounts offer 4-5% (low risk). Any investment consistently beating its benchmark is performing well. Higher returns usually come with higher risk.
- How do I compare investments with different time periods?
- Use annualized ROI instead of total ROI. A 100% total return over 10 years (7.2% annualized) is actually worse than a 50% return over 3 years (14.5% annualized). Annualized ROI normalizes returns to a per-year basis, making any two investments directly comparable regardless of holding period.
- What is the difference between ROI and total return?
- Total return is the dollar amount gained or lost (Final Value − Initial Investment). ROI expresses that gain as a percentage of the initial investment. For example, a $5,000 gain on a $10,000 investment is a 50% ROI, but a $5,000 gain on a $100,000 investment is only 5% ROI. ROI is more useful for comparing investment efficiency.
- Does ROI account for inflation?
- Standard ROI calculations show nominal returns, not adjusted for inflation. To get real (inflation-adjusted) ROI, subtract the inflation rate from your annualized ROI. For example, a 10% nominal return with 3% inflation gives approximately 7% real return. For long-term planning, always consider inflation-adjusted returns.