ROI Calculator — Return on Investment
Calculate the return on investment (ROI) for any investment. Enter your initial investment and final value to see your total and annualized returns. See also Compound Interest Calculator and CAGR Calculator.
How to Calculate ROI
Return on Investment (ROI) measures the profitability of an investment relative to its cost. To calculate ROI, subtract the initial investment from the final value, then divide by the initial investment and multiply by 100. A positive ROI means you made money; a negative ROI means you lost money. If you know the time period, you can also calculate the annualized ROI using the CAGR formula, which accounts for the compounding effect over multiple years.
ROI Formula
ROI = ((Final Value − Initial Investment) / Initial Investment) × 100
Annualized ROI:
Annualized ROI = ((Final Value / Initial Investment)^(1/years) − 1) × 100
Where:
Final Value = ending value of the investment
Initial Investment = amount originally invested
years = holding period in years
Example Calculation
Initial Investment: $10,000
Final Value: $15,000
Time Period: 3 years
ROI = (15,000 − 10,000) / 10,000 × 100 = 50%
Annualized ROI = (15,000 / 10,000)^(1/3) − 1 = 14.47%
Total Gain: $5,000
Gain per Year: $1,666.67
ROI Reference Table
| Investment | Final Value | Years | ROI | Annualized |
|---|---|---|---|---|
| $10,000 | $12,000 | 1 | 20.00% | 20.00% |
| $10,000 | $15,000 | 3 | 50.00% | 14.47% |
| $10,000 | $20,000 | 5 | 100.00% | 14.87% |
| $25,000 | $40,000 | 7 | 60.00% | 6.96% |
| $50,000 | $100,000 | 10 | 100.00% | 7.18% |
| $5,000 | $3,500 | 2 | -30.00% | -16.33% |
Frequently Asked Questions
What is a good ROI?
A "good" ROI depends on the investment type and risk. The S&P 500 has historically returned about 10% annually. Real estate typically returns 8-12%. A higher-risk investment should offer a higher potential ROI to compensate for the risk.
What is the difference between ROI and annualized ROI?
ROI measures the total return over the entire period. Annualized ROI converts that to an equivalent yearly rate, making it easier to compare investments held for different lengths of time. A 50% ROI over 5 years is very different from 50% over 1 year.
Does ROI account for inflation?
No, standard ROI is a nominal return. To get the 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.
Can ROI be negative?
Yes. A negative ROI means you lost money on the investment. If your final value is less than your initial investment, the ROI will be negative, indicating a loss.