ROI Calculator

Calculate the Return on Investment (ROI) for any investment or project. See both simple ROI percentage and annualized ROI.

About this Calculator

Calculate the Return on Investment (ROI) for any investment or project. See both simple ROI percentage and annualized ROI.

Formula & Calculations

Formula

ROI % = ((Final Value - Initial Investment) / Initial Investment) × 100

Where:

ROI %=Return on investment as a percentage
Final=Final value of the investment
Initial=Initial investment amount
Annualized ROI=Yearly equivalent return rate accounting for compounding

Assumptions

Simple ROI does not account for the time value of money.
Annualized ROI uses the compound annual growth rate (CAGR) formula.
Does not include taxes, fees, or transaction costs.

Calculation Examples

Example 1

Inputs:Initial Investment: $10,000, Final Value: $15,000, Years: 3

Result:Gain: $5,000, ROI: 50%, Annualized ROI: 14.47%

A $10,000 investment growing to $15,000 over 3 years returns 50% total or approximately 14.47% per year compounded.

Example 2

Inputs:Initial Investment: $50,000, Final Value: $47,500, Years: 2

Result:Loss: -$2,500, ROI: -5%, Annualized ROI: -2.53%

This investment lost 5% over 2 years, representing a negative annualized return.

Frequently Asked Questions

What is a good ROI?

A good ROI varies by investment type. Stock market averages around 7-10% annually (inflation-adjusted). Real estate and business investments often target 10-20%. Any positive ROI above inflation and risk-free rates is generally good.

What is CAGR?

CAGR (Compound Annual Growth Rate) measures the mean annual growth rate of an investment over a specified time period longer than one year. It smooths out volatility and shows what constant rate would produce the same result.